Opinion
No. FA97-0161219S
November 18, 2009
MEMORANDUM OF DECISION
The marriage of the parties was dissolved by decree of this court on October 7, 1998, at which time, a Separation Agreement of even date therewith was approved by the court and incorporated in the decree by reference. They are the parents of two grown sons, both of whom have reached the age of twenty-three. The matter comes before the court by way of a Motion for Modification and a Motion for Contempt filed by the plaintiff husband ("husband"). The husband alleges a substantial change of circumstances since the date of the original order. The defendant wife ("wife"), who objects to the modification, has also filed a Motion for Contempt, and she seeks an award of attorneys fees as well. The various motions all relate to the interpretation and enforcement of the provisions of Article III of the Separation Agreement.
The husband is currently 62 years old, but will turn 63 during the month of December. Although unregistered, he is a self-employed financial manager for a relatively small group of clients. The income from this activity is modest at best. In fact, he expects to lose a major client by the end of this year. He also trades for his own account as well. His investment portfolio is heavily leveraged, thus any income from it is more than offset by interest payments on his substantial margin loan. The husband is well educated, holding two degrees from MIT, and he has had extensive corporate banking experience during his earlier career, which terminated in 2001. Thereafter, he sought employment as a consultant for a period of two years. Since that time, he has worked at his present occupation. He is in apparent good health, as no evidence was introduced concerning any outstanding health issues. The husband is eligible to receive Social Security at a reduced rate, but he has elected not to apply for it until he reaches normal retirement at age 66. In addition, he currently receives a pension from the Portuguese Navy, and he will be eligible to receive a pension from a former employer, First Boston, at age 65. He lives in Virginia Beach, Virginia, in a home which he values at $1,492,000.00, that has a mortgage in the amount of $448,490.46. In addition, at the time of the dissolution, he held a one-quarter interest in real property in Lisbon that had been gifted to him by his father. Following the dissolution, he inherited another one-quarter interest in the same property from his mother. Subsequent thereto, in two separate transactions, he sold his interest therein to a cousin by way of an installment purchase. The final payment from the first sale was made and the deed registered, virtually simultaneously, with the initiation of the second sale, the final installment payment for which will come due in approximately 2017.
The wife is currently 56 years old and is also well-educated, holding degrees from Portugal as well as from Fairfield University. She had a bout with cancer prior to the dissolution, and she has regular follow-up visits. Otherwise, she is in apparent good health, since she offered no evidence of any other serious medical conditions. She holds down three jobs, to wit: as counselor, instructor, and self-employed family counselor. The wife resides in the former marital home in Darien, which she values at $1,150,000.00. The home has a small mortgage ($53,753.00), which she told the court should be fully paid off in about two years.
One bone of contention was the interpretation and implementation of Article 3.5 of the Separation Agreement, which calls for an offset against or reduction of the husband's alimony obligation in an amount equal to one-half of the wife's gross earnings from employment in excess of $20,000.00 annually. The wife testified that she offered to write the husband a check for 2007, but that he agreed to waive any adjustment. The husband did not deny the waiver, however, he claimed that the wife had understated her income for the year. The husband claims that there was no adjustment for the year 2008, and the evidence supports this. A review of Article 3.5, demonstrates that there is ambiguity in its terms, in particular, the fact that there is no specific language that sets forth the timing and methodology of any such adjustment.
The matter was tried during the course of one day, with final argument the following day. The court held the evidence open until 5:00 P.M. on November 13, 2009, in order to give the wife an opportunity to consult with her Portuguese attorney regarding documents memorializing the husband's real estate transactions in Lisbon.
FINDINGS
The Court, having heard the testimony of both parties, and having considered the evidence presented at hearing, as well as the factors enumerated in General Statutes § 46b-62, 46b-82, 46b-86, and 46b-87, hereby makes the following findings:
1. That an award of periodic alimony may be modified upon the demonstration of a substantial change of circumstances, unless the order itself clearly precludes modification. General Statutes § 46b-86(a); Borkowski v. Borkowski, 228 Conn. 729, 737 (1994); Spencer v. Spencer, 71 Conn.App. 475, 481 (2002); Schorsch v. Schorsch, 53 Conn.App. 378, 382 (1999).
2. That there has been a substantial change of circumstances since the date of the last order, in that the husband's income has declined substantially, and in that the wife is now currently employed outside the home and her income has increased substantially.
3. That when a court has found that a substantial change of circumstances has occurred, it must apply the statutory criteria set forth in General Statutes § 46b-82 in order to determine the needs and financial resources of the parties. Borkowski v. Borkowski, 228 Conn. 729, 736 (1994).
4. That where retroactivity is sought pursuant to General Statutes § 46-86(a), motions for modification of alimony must be served in accordance with General Statutes § 52-50; that the purpose of that provision is to accord due process to the other party. Shedrick v. Shedrick, 32 Conn.App. 147, 15-52 (1993); that the evidence supports a finding that the wife was served on January 14, 2009, per the marshal's return as on file; and that under all the facts and circumstances, it is equitable and appropriate to enter an order of modification retroactive to June 1, 2009.
5. That alimony orders must be based upon the net income of the parties. Morris v. Morris, 262 Conn. 299, 306 (2003); Ludgin v. McGowan, 64 Conn.App. 355, 358 (2001).
6. That based upon the current financial affidavits of the parties, the net income of the wife is $2,529.00 per month, and the net income of the husband is $1,506.26.
7. That, in addition to the net income as shown on the husband's financial affidavit, the evidence, including the testimony of the husband, supports a finding that the husband's trading on his own account constitutes a significant element of his financial activity in pursuit of his present and future support; and that the resultant capital gains, whether realized or unrealized, constitute "a steady stream of revenue," and as such, are a factor for the court to consider in making its order. Gay v. Gay, 266 Conn. 641, 647-48 (2003) (including fn. 3).
8. That a finding of contempt must be based upon the breach of a clear and unequivocal order of the court without good cause. Blaydes v. Blaydes, 187 Conn. 464, 467 (1982); that the court may consider ambiguity of an order as a factor in its analysis, Sablosky v. Sablosky, 258 Conn. 713, 723 (2001); and that Article 3.5 of the Separation Agreement is ambiguous, in that it does not state clearly the method and timing of the alimony adjustment, if any.
9. That under all the facts and circumstances, including a) the husband's waiver regarding the wife's 2007 income, b) the husband's filing for modification shortly after the end of calendar year 2008, and c) the ambiguity in Article 3.5 of the Separation Agreement, the actions of the wife in failing to adjust the alimony during the years 2007 and 2008, while they do constitute a breach of the underlying order, such actions do not constitute contempt. Eldridge v. Eldridge, 244 Conn. 523, 529 (1998).
10. That the evidence supports a finding that the wife's annual gross income from employment in 2008 was in excess of $20,000.00 by the amount of $18,057.00; that the husband is entitled to an adjustment in his alimony obligation for 2008 in the amount of $9,029.00; that the wife's gross income from employment for the months of January through May did not exceed $20,000.00 and therefor the husband is not entitled to an adjustment for the year 2009; and that the total alimony adjustment is $9,029.00.
11. That under all the facts and circumstances, the actions of the husband do not constitute contempt; and that his failure to pay any alimony commencing June 2009 to date, in the absence of a termination of his obligation to do so, does however, constitutes a breach of a clear order of the court. Sablosky v. Sablosky, 258 Conn. 713, 719 (2001).
12. That, each party having failed in one or more respects to comply with the underlying order of the court regarding the payment of periodic alimony, it is equitable and appropriate that each party be responsible for their own attorneys fees and costs incurred herewith.
ORDER THE FOREGOING MOTIONS HAVING BEEN HEARD, IT IS HEREBY ORDERED THAT:
1. Commencing retroactive to June 1, 2009, and monthly thereafter, the husband shall pay to the wife the sum of $1,000.00 as and for periodic alimony, until the death of either party or the remarriage of the wife, whichever shall sooner occur.
2. The arrearage in the amount of $5,000.00, resulting from this retroactive order shall be offset by the sum of $9,029.00, leaving a balance due and owing from the wife of $4,029.00. Commencing December 1, 2009, the husband shall be entitled to deduct from his alimony obligation the sum of $279.00, and thereafter on the first day of each and every month the sum of $250.00, until the balance is paid in full.
3. Each party shall be responsible for their respective attorneys fees and costs incurred in connection with this action.
4. Meaning and intending hereby, that the foregoing order constitutes a modification of Article III of the Separation Agreement of the parties, with the express exception of Article 3.9, which shall remain in full force and effect.
5. The Court hereby orders an Contingent Wage Withholding Order pursuant to General Statutes § 52-362(b) in order to secure the payment of the alimony order.