Opinion
FSTCV176034415S
09-23-2019
Elise ZEALAND v. Scott BALBER
UNPUBLISHED OPINION
OPINION
KAVANEWSKY, J.
This is a case in which the court has been asked to determine the disposition of certain real and personal property in which both parties claim an ownership interest.
The plaintiff, Elise Zealand, and the defendant, Scott Balber are attorneys who practiced law in New York and who had a common background in civil litigation. At some juncture, they and their firms represented clients who had adversarial positions in a significant case. The parties first became socially acquainted in 2007 when they and others co-mingled at a gathering to, as characterized by the plaintiff, celebrate the completion of the discovery phase of this mutual case. They began dating. At the time, the plaintiff was single. The defendant was married with two children. In 2008, the defendant left his wife and began living with the plaintiff. In 2010, the parties had a child together.
At or about the same time, the defendant proposed marriage to the plaintiff and gave her a diamond ring. The plaintiff accepted the ring in contemplation of marriage, but the marriage never occurred. The plaintiff wanted the financial security she felt that the defendant could provide, but at the same time she had misgivings about marrying him. The defendant never truly pressed the situation, and he gave the plaintiff a large part of the financial security she wanted. After the birth of their child, the plaintiff left her employment. She continued as the child’s primary caregiver. The defendant was the sole source of support of the plaintiff and their child. The defendant also funded and regularly contributed to a joint checking account which was used by the plaintiff and himself.
In December 2012, the parties purchased a home at 112 Hillspoint Road in Westport, Connecticut (the "Hillspoint property"). It was intended to be a "getaway" or "country home." It was to accommodate the parties and their own child, and also the defendant’s two children when he had visitation with them. The closing price was $1.16 million. Title to the property was taken by the parties as tenants-in-common. It was financed with a mortgage for $925,000. The equity needed to close, $235,000, and the closing costs, some $15,000, were completely funded by the defendant. The cost to carry the property (i.e., payments on the mortgage, taxes and insurance) have been approximately $5,300 per month, and utilities and regular property maintenance costs have been approximately $8,000 per month. These amounts, too, have been funded solely by the defendant’s earnings.
Title to the property was originally to be solely in the name of the defendant. However, when the plaintiff learned of this, she voiced concerns to the defendant, and title was ultimately taken in both of the parties’ names. Likewise, the mortgage note and deed were signed by both parties (as one would expect any lender to require). However, at trial, when the plaintiff was confronted with the fact that she had signed the mortgage note and deed, she expressed complete astonishment. The court finds that reaction to have been somewhat incredible.
The parties made improvements and repairs to the property. The plaintiff was generally "on site" more regularly than the defendant, so she arranged for or managed many of these. Also, in addition to customary and necessary home furnishings, the parties purchased certain artwork. One of the pieces was referred to as a "Punching Bag" by Jeffrey Gibson (the "Punching Bag"). The defendant had a particular interest in the item, and he purchased it from a dealer with whom he had a close relationship. The dealer waived his customary markup, leaving the defendant to pay $36,000 for this piece. The plaintiff claims that it is worth "well into the six figures." She bases that upon the fact that the piece was loaned out to a gallery for exhibition, and on her opinion that the artist’s career was on the rise. The court does not find that the plaintiff’s valuation is credible. Moreover, there was no reliable valuation by either party for other home furnishings. Finally, the court finds that at the time of trial, the fair market value of the Hillspoint property was approximately $1.2 million, and the mortgage debt was approximately $765,000.
In the court’s view, the relationship between the parties has been precarious. The tone and demeanor of each of the parties to one another during the trial corroborated this. The parties used Hillspoint on the basis stated previously for not quite four years. In mid-2016, the plaintiff and the parties’ child moved out of the Hillspoint property. The defendant locked its doors. The plaintiff sold the diamond ring, which had been purchased by the defendant for $70,000, for $18,000. She retained the proceeds of the sale. The court will set forth additional findings as necessary.
There are three assets, or asset categories, which are in dispute between the parties. These are the Hillspoint property, the artwork and furnishings purchased by the parties, and the diamond ring. Pursuant to statute the court must consider an equitable distribution between the parties to the property itself, the artwork and furnishings. In her complaint, the plaintiff seeks a partition by sale of these properties, and an equal division with the defendant of any net proceeds. The court must also determine the manner in which the distribution is best promoted. The court will take up those matters first. Then, the court will address the defendant’s counterclaim, which is centered on the issue of the diamond ring.
The court has broad discretion in determining an equitable distribution of the Hillspoint property, and of the artwork and furnishings purchased by the parties. Rissolo v. Betts Island Oyster Farms, Inc., 117 Conn.App. 344, 979 A.2d 534 (2009). "An action for partition at common law was equitable in nature, requiring courts to examine all relevant circumstances ... The determination of what equity requires in a particular case, the balancing of the equities, is a matter for the discretion of the trial court." (Internal quotation marks omitted.) Eisenberg v. Tuchman, 94 Conn.App. 364, 375-76, 892 A.2d 1016, cert. denied, 278 Conn. 909, 899 A.2d 36 (2006)." Rissolo, at 349. The court should consider not only the source of funding for a property’s acquisition and maintenance, but it should also take into account all other equitable considerations, including nonmonetary contributions made by the parties and the intentions of the parties with respect to the property. Fernandes v. Rodriguez, 90 Conn.App. 601, 879 A.2d 897, cert. denied, 275 Conn. 927 (2005); Dicerto v. Jones, 108 Conn.App. 184, 947 A.2d 409 (2008). The court has done that here.
It is beyond dispute that the defendant was the sole source of providing the monies to purchase the Hillspoint property, to make improvements, to purchase furnishings, artwork and other artifacts, and to carry the mortgage debt and other property expenses. However, the plaintiff assisted in several ways. She worked with a broker to find the property, she followed up on matters for mortgage funding, and she handled some pre-closing inspections. After the closing, she was responsible for making arrangements for many repairs, and for purchasing general furnishings. Both parties had a hand in identifying possible purchases.
The parties had a very different perspective as to what their intentions were in the event that they were to part ways, as occurred here. There is no doubt that both parties benefited from the purchase of the Hillspoint property, and their renovating and furnishing the same. As mentioned before, it was a "getaway home" that could accommodate both parties, their child, and the defendant’s own two children. The parties entertained and they lived comfortably there. Beyond that, the court does not give great credence to either party’s testimony regarding any "agreement" between them in the event that they were to separate. Most certainly, neither party agreed to release the property to the other. Therefore, the court cannot put any real weight on the parties’ supposed intentions.
The court is also required to determine the manner of partition of the Hillspoint property, its furnishings, and artwork. Gen. Stat. § 52-500(a) provides that: "Any court of equitable jurisdiction may, upon the complaint of any person interested, order the sale of any property, real or personal, owned by two or more persons, when, in the opinion of the court, a sale will better promote the interests of the owners. If the court determines that one or more of the persons owning such real or personal property have only a minimal interest in such property and a sale would not promote the interests of the owners, the court may order such equitable distribution of such property, with payment of just compensation to the owners of such minimal interest, as will better promote the interests of the owners." (Italics added.)
"Our legislature amended General Statutes § 52-500(a) in response to Fernandes. Public Acts 2004, No. 04-93, § 1. "As amended, § 52-500(a) permits the court to order an equitable distribution of the property if it determines that one or more of the persons owning the property have only a minimal interest in the property and a sale would not promote the interest of the owners." (Emphasis in original.) Fusco v. Austin, 141 Conn.App. 825, 833, 64 A.3d 794 (2013). Our legislature did not further define or specify the "interest" that would qualify as "minimal" under the statute." Cavanagh v. Richichi, Superior Court, judicial district of Stamford/Norwalk, Docket No. FST-CV- 11-6009029S (Sept. 5, 2017, Heller, J.) (2017 WL 4812331). In OTN Osceola, LLC v. Roth-Natale, Superior Court, judicial district of Stamford/Norwalk, Docket No. FST-CV-06-5001565-S (Sept. 4, 2007, Adams, J.) (44 Conn.L.Rptr. 212), the court concluded that the phrase "minimal interest" was ambiguous and looked to the legislative history of the 2004 amendment to General Statutes § 52-500(a) for guidance. The court found that the legislative history provides three pieces of relevant information. First it noted that Public Act 04-93 was designed to broaden the court’s equitable power in partition actions. Second, there was concern that ordering a sale of property by auction often caused expenses not in proportion to the value of the property. Third, while certain percentages of ownership were seen by some legislators to fall clearly within the meaning of minimal interest (e.g., less than 10 percent) or without (e.g., 35 or 50 percent) and an interest could include more than just percentage of ownership, there remained a substantial area where the court, considering relevant factors, could exercise its judgment in determining whether an interest was minimal so as to justify exercising the option of ordering an owner to quitclaim his or her interest to another owner in return for just compensation.
Given all of these factors, the court believes that the plaintiff should receive consideration for her contributions, but that it is a relatively minimal interest compared to that of the defendant. The court further finds that the plaintiff can receive an equitable and just compensation for that interest by means of a payment from the defendant, and that a sale is not necessary and would not better promote the relative interests of the plaintiff and of the defendant. This is not a situation that demands a sale of these assets. There appears to be ample equity in the Hillspoint property. A sale would carry with it attendant costs and expenses. A court-ordered sale would also likely signify that it is being sold under "distress" conditions, which would most likely result in a lower price than one achieved on an open market. In the court’s view, a lump-sum payment to the plaintiff would equitably compensate her, and would allow the defendant to control the retention or disposition of these assets without unnecessary penalty to him.
Last, the court addresses the matter of the diamond ring given by the defendant to the plaintiff. In his counterclaim, the defendant has set forth his grounds for recovery of the ring in three different counts: in the first count, the defendant claims wrongful conversion; in the second count, he claims statutory theft under Gen. Stat. § 52-564; finally, in the third count, he claims unjust enrichment. The defendant, as donor of the ring, has cited to numerous authorities in his posttrial memoranda concerning ownership rights in the ring in the event that a marriage did not occur. (See, defendant’s posttrial memorandum, June 14, 2019, pages 15-17; defendant’s posttrial reply memorandum, June 21, 2019, pages 11-14.)
This court cannot comment upon the defendant’s multiple counts of recovery any better than the court did in the case of Thorndike v. Demirs, Superior Court, judicial district of Waterbury, Docket No. CV-05-00000243-S (July 26, 2007, Gormley, J.) (44 Conn.L.Rptr. 30): "This case illustrates clearly the problem of overpleading. In the [defendant’s] briefs he now is urging on the court a simple proposition; 1) the engagement ring is a conditional gift, 2) the condition of the gift is the subsequent marriage of the parties to the engagement, 3) the marriage did not take place and 4) the ring must be returned to the donor. Wouldn’t it be great if the Complaint had a count within it that simply pled that? The only way the court can get to that issue is through [unjust enrichment] and to do so will require the court to ignore certain factual allegations that are superfluous to an unjust enrichment claim."
The court finds that the ring was originally given by the defendant to the plaintiff in contemplation of their marriage. The ring was a conditional gift. However, the analysis does not end there. This is because the court also finds that any condition attached to the ring (i.e., marriage) had long been abandoned by the defendant at the time he finally demanded its return by the plaintiff in 2016. Over the many months and years which followed the giving of the ring, all without barely a whisper of marriage, the defendant relinquished any condition attached to the ring. The parties had a tempestuous relationship. At best, the ring became a symbol to be worn by the plaintiff in the company of mutual friends and colleagues to signify the supposed sincerity of the parties’ love for one another. The court finds that the defendant abandoned or waived any intention attached to the initial giving of the ring. Therefore, the plaintiff is entitled to the ring or to any proceeds from its sale.
The plaintiff argues that the court should base its decision upon principles of New York law. The defendant believes that Connecticut law should apply. Under Connecticut law, waiver involves the "intentional relinquishment of a known right." Jenkins v. Indemnity Ins. Co., 152 Conn. 249, 257, 205 A.2d 780 (1964). New York law is in accord. See, Sunoce Properties, Inc. v. Bally’s Total Fitness of Greater New York, Inc., 148 A.D.3d 751, 48 N.Y.S.3d 476 (2017). It makes little difference, then, what jurisdiction’s law should be applied to determine the disposition of the ring.
The court enters the following orders on the plaintiff’s complaint and on the defendant’s counterclaim:
1) The defendant shall have sole right, title and interest to the Hillspoint property, and to all furnishings and artwork therein, including the "Punching Bag" by Jeffrey Gibson.
2) The plaintiff shall have sole right, title and interest to the diamond ring or to any proceeds from its sale.
3) The defendant shall pay the plaintiff the sum of $25,000 at the time of the plaintiff’s transfer to the defendant of the plaintiff’s right, title and interest to the Hillspoint property.
4) Any and all tax consequences of these orders shall be the responsibility of and shall vest in the defendant.
5) The defendant shall prepare, within 30 days, all necessary documents to effectuate the orders of the court. The plaintiff shall execute in proper form any and all documents necessary to transfer title to the Hillspoint property and she shall return them to the defendant no later than 25 days following their receipt.
6) The defendant shall prepare the judgment file.
7) No costs shall be taxed against either party.