Opinion
No. FA 06-4015529 S
May 13, 2009
MEMORANDUM OF DECISION RE PLATNTIFF'S POST-TRIAL MOTION
At issue is whether the court has jurisdiction to grant the plaintiff's post-trial motion for the execution of a subordination agreement prioritizing her fixed mortgage on the house. The motion is granted on the ground that since it is to effectuate the judgment, not to modify a property division, the court has jurisdiction over the matter.
FACTS
On March 4, 2009, the plaintiff, Rose Croteau n/k/a Rose Zmarzlak, filed a summons, order for hearing and notice and motion for order against the defendant, Thomas Croteau. In her motion for order and/or further relief for the execution of a subordination agreement, the plaintiff alleges the following facts. On July 10, 2006, her marriage to the defendant was dissolved and their separation agreement incorporated into the judgment by reference. Article III, § 3.1 of the separation agreement sets forth the distribution of the marital assets. On the date of dissolution, the marital residence had a mortgage of $100,000 with a fair market value of $290,000. Because the property was in need of improvements and repairs, the plaintiff was unable to secure a conventional mortgage. She refinanced in April 2007 for $150,000 under a loan with a variable interest rate of 8.5%, adjustments of "every 6 months commencing May 2009 at a rate equal to 6.75% plus the existing LIBOR rate." The loan was conditioned on making improvements to the property, which were made. In addition, "[t]he mortgage to Husband was recorded on the Stratford Land Records in Book 3197, page 070 on June 9, 2008 after the aforesaid refinance without objection by the Husband. The marital property has a current appraised value of $275,000 with an existing mortgage of $146,500." Following the improvements, the plaintiff was able "to [secure] a new fixed mortgage, scheduled to close on April 17, 2009, in the amount of $150,000 with an interest rate of 5% resulting in a monthly savings of $340 which will assist with the financial responsibilities of the parties' minor children. Despite requests of the Plaintiff, the Defendant has declined to execute a Subordination Agreement, despite the fact that it in no way erodes his security (in that it does not increase the amount of the proposed mortgage ahead of his) and enhances the likelihood of the Plaintiff being able to carry the property until its sale and distribution of equity pursuant to the Judgment." The plaintiff requests this court to order the defendant to execute a subordination agreement.
A hearing was held on March 26, 2009, at which time the issue was defined as whether the court has subject matter jurisdiction to order the execution of the subordination agreement. The plaintiff argued that based, on article XIV, § 14.3, entitled "Decree Binding Affect; After Documents" of the separation agreement, the subordination agreement is permissible to effectuate or implement the provision regarding the marital home by subordinating the mortgage to the defendant. In response, the defendant argued that, pursuant to General Statutes § 46b-81, the court cannot modify the judgment of divorce regarding a property distribution, which is what the plaintiff was requesting from the court. Subsequently, the court ordered each of the parties to submit a supplemental memorandum of law on the issue. On April 6, 2009, the plaintiff filed a memorandum in support of her motion to execute a subordination agreement and the defendant a memorandum in opposition.
DISCUSSION
The plaintiff seeks a court order directing the defendant to subordinate his $85,000 mortgage on the marital home to a replacement first mortgage in the principal amount of the current first mortgage of $150,000 plus approximately $5,000 for closing costs. In support of her position, she argues that (1) his mortgage has always been in second position because their marital residence was encumbered by a first mortgage at the time of dissolution on July 10, 2006; (2) the court has subject matter jurisdiction under its equitable powers to interpret and enforce its own judgments; (3) the separation agreement specifically contemplated a need for "after-documents" to be executed to implement the judgment as can be gleaned from article XIV, § 14-3 of their separation agreement incorporated by reference into the judgment; (4) the subordination agreement is essential for her to refinance her present adjustable rate mortgage to keep the children in their home and in their school system; and (5) she has a commitment for a fixed rate mortgage subject only to the defendant subordinating his mortgage to her mortgage. Relying on § 46b-8l and the interpretation of that statute in Rathblott v. Rathblott, 79 Conn.App. 812, 832 A.2d 90 (2003), the defendant counters that the court has no continuing jurisdiction over this action and the separation agreement does not provide for it in article XIV, § 14.3. The defendant argues that if the plaintiff believed he was required to sign a subordination agreement pursuant to the separation agreement, she would have filed a motion for contempt, which she has not; and the plaintiff, in fact, is requesting the court to modify postjudgment the property orders entered at the time of the dissolution. The defendant maintains that the court does not have subject matter jurisdiction over the issue of refinancing the marital residence to issue such orders.
The division of property is governed by § 46b-81. "At the time of entering a decree . . . dissolving a marriage . . . the Superior Court may assign to either the husband or wife all or any part of the estate of the other . . ." General Statutes § 46b-81(a). "In fixing the nature and value of the property, if any, to be assigned, the court, after hearing the witnesses, if any, of each party . . . shall consider the length of the marriage, the causes for the annulment, dissolution of the marriage or legal separation, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each of the parties and the opportunity of each for future acquisition of capital assets and income . . ." General Statutes § 46b-81(c). "Accordingly, the court's authority to divide the . . . property of the parties, pursuant to § 46b-81, must be exercised, if at all, at the time that it renders judgment dissolving the marriage." Rathblott v. Rathblott, supra, 79 Conn.App. 819. "[T]he statute . . . enables the trial court to transfer property in a marital dissolution action, [but] does not [provide for the court to] retain continuing jurisdiction over any portion of the judgment that constitutes an assignment of property. Bunche v. Bunche, 180 Conn. 285, 289, 429 A.2d 874 (1980) . . . Therefore, a property division order generally cannot be modified by the trial court after the dissolution decree is entered . . ." (Citation omitted; internal quotation marks omitted.) Blaisdell v. Blaisdell, Superior Court, judicial district of New London at Norwich, Docket No. FA 00 0121221 (October 3, 2001. Swienton, J.) (30 Conn. L. Rptr. 543-44); see also General Statutes § 46b-86(a) (excludes modification of property assignments made under § 46b-81).
"Although the court does not have the authority to modify a property assignment, a court, after distributing property, which includes assigning the debts and liabilities of the parties does have the authority to issue postjudgment orders effectuating its judgment." (Internal quotation marks omitted.) Fewtrell v. Fewtrell, 87 Conn.App. 526, 531, 865 A.2d 1240 (2005). "[T]he trial court's continuing jurisdiction to effectuate its prior judgments, either by summarily ordering compliance with a clear judgment or by interpreting an ambiguous judgment and entering orders to effectuate the judgment as interpreted, is grounded in its inherent powers, and is not limited to cases wherein the noncompliant party is in contempt, family cases, cases involving injunctions, or cases wherein the parties have agreed to continuing jurisdiction." Avalon Bay Communities, Inc. v. Plan Zoning Commission, 260 Conn. 232, 246, 796 A.2d 1164 (2002). "Where a decision as to whether a court has subject matter jurisdiction is required, every presumption favoring jurisdiction indulged . . . Thus, if the . . . motion . . . can fairly be construed as seeking an effectuation of the judgment rather than a modification of the terms of the property settlement, this court must favor that interpretation." (Internal quotation marks omitted.) Fewtrell v. Fewtrell, supra, 532.
"It is within the equitable powers of the trial court to fashion whatever orders are required to protect the integrity of the original judgment. Connecticut Pharmaceutical Ass'n., Inc. v. Milano, 191 Conn. 555, 563-64, [ 468 A.2d 1230] (1983). The purpose of a property division pursuant to a dissolution proceeding is to unscramble existing marital property in order to give each spouse his or her equitable share at the time of the dissolution. Smith v. Smith, 249 Conn. 265, 275, [ 752 A.2d 1023] (1999). A dissolution of marriage is an equitable proceeding and (that) the division of the marital estate is to be done equitably. Falkenstein v. Falkenstein, 84 Conn.App. 495, 504, [ 854 A.2d 749, cert. denied, 271 Conn. 928, 859 A.2d 581] (2004)." (Internal quotation marks omitted.) Wasson v. Wasson, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. FA 98 0165911 (December 30, 2004, Tierney, J.) (38 Conn. L. Rptr. 491, 492), aff'd, 91 Conn.App. 149, 881 A.2d 356, cert. denied, 276 Conn. 932, 890 A.2d 574 (2005).
In Wasson v. Wasson, supra, the court found the "following cases . . . instructive as to whether the relief requested is a modification of property division or an effectuation of the original judgment. Clement v. Clement, 34 Conn.App. 641, 646, [ 643 A.2d 874] (1994) (nonpayment of mortgage by husband, causing wife to lose house, undermined integrity of court's judgment; therefore, court properly ordered husband to pay wife value of loss); Roberts v. Roberts, 32 Conn.App. 465, [ 629 A.2d 1160] (1993) (order to auction property effectuated original judgment despite fact that original judgment did not call for sale at auction); Falkenstein v. Falkenstein, [ supra], 84 Conn.App. [496] (order to sell marital house at a set price not modified by post-judgment motion preventing either party from purchasing the house at that set price; `[§]46b-81 grants the court discretion to render such an order to carry the dissolution decree into effect . . . '. . .); Roos v. Roos, 84 Conn.App. 415, [ 853 A.2d 642, cert. denied, 271 Conn. 936, 861 A.2d 510] (2004) (order that each party will hereafter not incur debt did not prevent court from finding one party in contempt for debt incurred after judgment and ordering the payment of that debt; the court held that the contempt orders are not modifications but orders effectuating the original judgment); Bunche v. Bunche, [ supra, 180 Conn. 289] (original order giving plaintiff the option to buy the marital home by paying 40% of the fair market value less the outstanding mortgage, was held to have been improperly modified by post judgment order providing for a specific purchase price in installment payments)." (Citation omitted.) Wasson v. Wasson, supra, 38 Conn. L. Rptr. 492.
The Wasson court concluded that an order authorizing the plaintiff-spouse to purchase the defendant's interest in the marital home was "necessary to preserve the marital home for the children" and prevent the loss of the home through a pending foreclosure sale "caused by the defendant's failure to keep the mortgage current" and constituted an effectuation of the original dissolution order of the trial court. Wasson v. Wasson, supra, 38 Conn. L. Rptr. 493. Likewise, the appellate court in Fewtrell also held that the motion, although characterized by the movant as a motion to modify, was really a request to effectuate the judgment. Fewtrell v. Fewtrell, supra, 87 Conn.App. 532. In Fewtrell, the court held that the trial court had subject matter jurisdiction to order the plaintiff to make his payments directly to the defendant to effectuate the original judgment of dissolution. Id.
The original division of marital property at the dissolution proceedings constitutes an assignment of property and, as such is not modifiable. See General Statutes §§ 46b-81 46b-86. The resolution of the issue in the present case turns on whether the relief that the plaintiff is seeking in her motion for an order to execute a subordination agreement is a modification of the court's order or the enforcement of the terms of the property distribution for which the original dissolution decree provided. Two sections of the separation agreement govern the division of the marital home. Section 3.1 of article III provides: "Wife shall pay Husband the sum of Eighty-five Thousand ($85,000.00) Dollars as a distribution of marital assets. Said amount shall be secured by a mortgage on the real property located at 45 Elizabeth Terrace, Stratford, Connecticut which mortgage shall become due and payable upon the death or remarriage of Wife or nine (9) years from the final date of dissolution, whichever shall first occur." Section 9.1 of article IX provides: "The parties presently own real property located at 45 Elizabeth Terrace, Stratford, Connecticut. Husband agrees to convey any and all interest that he may have in the said premises to Wife prior to or at the time of dissolution of the marriage. Wife agrees to assume the responsibility for the payment of the first mortgage on the premises and shall hold Husband harmless therefrom. Wife agrees to secure Husband released from all liability under said mortgage by written discharge from the bank or by way of refinance of said mortgage within nine (9) years of the date of dissolution." The terms of the separation agreement contemplate that the plaintiff is to be responsible and liable for the payment of the first mortgage on the premises located at 45 Elizabeth Terrace in Stratford, Connecticut and, in addition, she is to be liable to the defendant for $85,000, which she may pay by securing a mortgage on the premises payable to the defendant upon her death, remarriage or within nine years of the date of dissolution, whichever first occurs. The terms further contemplate that she will be able to refinance the original first mortgage on the house. Section 14.3 of article XIV of the separation agreement provides: "Each of the parties hereby agrees to sign and deliver, free of cost and expense any documents which may be necessary or desirable to effectuate or implement any of the provisions herein contained." The language of this section suggests that the plaintiff and the defendant are to agree to sign any after documents, not only those deemed necessary but also those deemed desirable, to implement or effectuate the provisions in the dissolution judgment. As the plaintiff correctly points out, the $85,000 mortgage to the defendant has always been second to the mortgage on the premises on the date of dissolution. The terms of the original order permit the refinancing of the original mortgage. The plaintiff has refinanced the mortgage at a fixed rate to prevent the loss of the marital residence for the children. Since the $85,000 mortgage has always been second to her mortgage, the plaintiff's request for an order to execute the subordination agreement is to effectuate the judgment and not a modification, over which the court has subject matter jurisdiction.
But see Warner v. Warner, Superior Court, judicial district of Hartford-New Britain at Hartford, Docket No. FA 880350472 (September 17, 1992, Norko, J.). In Warner, the defendant requested the "court to order the plaintiff (post-dissolution) to subordinate his second mortgage so that she [could] refinance her first mortgage for a greater amount . . . [T]he purpose of [which was] to receive cash to improve the home and to lower [her] payments to the bank." The court held that, "[w]hile the reasons the defendant offer[ed] for refinancing [were] economically sound, [the] court . . . [was] without jurisdiction to order the subordination." Citing to Bunche v. Bunche, supra, 180 Conn. 285 and Ammirata v. Ammirata, 5 Conn.App. 198, 497 A.2d 768 (1985), the court concluded that it only retained "jurisdiction to enforce property division orders not modify them . . . [and, as a result denied] . . . [t]he [defendant's] motion for contempt . . ." Although, the Warner court held that the subordination agreement was an attempt to modify the property distribution in the original dissolution decree, it failed to provide any reasoning or analysis for its holding.
CONCLUSION
The court has subject matter jurisdiction over the plaintiff's motion for an order to execute the subordination agreement. The plaintiff's motion is granted.
So ordered.