Opinion
FA094110314S
09-25-2017
Michael Halperin v. Ronda Halperin
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE DEFENDANT'S MOTION TO CORRECT, POSTJUDGMENT
John L. Carbonneau, J.
The court filed a Memorandum of Decision in this case on January 20, 2016 [61 Conn. L. Rptr. 748, ]. The court decided that income from two corporate interests acquired by plaintiff after the dissolution must be included in the calculation of his alimony/support obligation to defendant in order to give effect to the language and intent of the parties' Agreement and Stipulation for Judgment dated March 11, 2010.
The parties now return to court via defendant's Motion to Correct (#162). The motion seeks first to rectify a misstatement of fact by the court; second to address some conflicting dicta in the court's decision and finally to determine if interest, dividends and capital gains from assets acquired after the dissolution must be included in the calculation of plaintiff's alimony/support obligation.
Plaintiff is represented by Attorney Dado Coric, and defendant is represented by her trial counsel, Attorney Campbell Barrett.
A very wise man once taught the court that a mistake is only a mistake when it can no longer be corrected.
First: Rectification of Misstatement of Fact
The court made seventeen findings of fact in its January 2016 decision. The court, having reviewed the testimony and exhibits and having considered the arguments and briefs of counsel, adopts these findings as a basis for the current motion, except for Number 13. The court correctly found that plaintiff received a property settlement of $2.1 Million in the divorce. In finding Number 13 the court stated " Plaintiff placed these proceeds in a Fidelity Investments account that he also received in the divorce." The court erred. This statement is contrary to the credible testimony and factually wrong. According to the uncontroverted evidence, the parties actually closed their Fidelity accounts during the marriage, and plaintiff opened a new Fidelity account after the judgment into which he placed his $2.1 Million property settlement.
It is familiar law that a court has the inherent authority to open, correct or modify its judgments. Nastro v. D'Onofrio, 76 Conn.App. 814, 821, 822 A.2d 286 (2003). After more than four months a trial court is without jurisdiction to amend its original memorandum of decision in matters of substance. State v. Wilson, 199 Conn. 417, 436-37, 513 A.2d 620 (1986) (emphasis added).
The court's error about the pre-judgment and post-judgment Fidelity accounts made no difference in the court's initial decision. It makes no difference in the current one. It does not concern a " matter of substance, " but in order to preserve and protect the integrity of and confidence in a court decision, it is necessary to correct errors when timely pointed out. Bauer v. Bauer, 308 Conn. 124, 60 A.3d 950 (2013). The court does so with finding Number 13: the parties closed their Fidelity accounts during the marriage, and plaintiff opened a new Fidelity account after the judgment into which he placed his $2.1 Million property settlement.
Second: Rectification of Court's Dicta
On pages 13 and 14 of its decision, the court attempted to pose some examples of what the parties' Agreement and Stipulation for Judgment intended to include and exclude as income.
The assets plaintiff received as his share of the divorce property settlement, including the $2, 105, 000.00 are now clearly shielded by 46b-81. He used a portion of this money to purchase a percentage interest in CESC and ISOI. These are " converted" assets and, as such, they are beyond defendant's reach. If plaintiff lends money to the companies, any interest income he earns is specifically excluded by the parties' agreement. Plaintiff may have invested in these businesses because he expected them to pay a dividend in the future. Such dividends, again, are specifically excluded by the agreement. His investment might yield a capital gain or loss depending on the increasing or decreasing value of the businesses if and when he decides to sell his percentage of ownership. Once again, this income is excluded specifically by the agreement. Gay v. Gay, 266 Conn. 641, 647, 835 A.2d 1 (2003) (Sale of capital asset in particular year not considered income unless shown to reflect a steady stream of income).
These examples about interest, dividends and capital gains were termed " musings" by defendant's counsel because they were inconsequential to the original decision of the court. Nonetheless, after review and consideration, the court realizes that its musings were wrong because the court failed to apply the parties' entire definition of income from the judgment.
Paragraph 8 of the judgment states:
Income for purposes of this calculation shall be the parties' respective " total income" that has historically been listed on line 22 (or the equivalent) of their joint 1040 federal tax returns. This shall include all employment, business, partnership, consulting or real estate income, whether received in cash or not, but shall specifically exclude all interest, dividend and capital gains income realized from assets divided as part of the property distribution component of this dissolution Judgment and any income received by the plaintiff husband as a result of patents or inventions which he has created and obtained. Capital losses, for whatever purpose, shall not serve as a reduction of a parties' income . . . (Emphasis added.)
" It is hornbook law that courts do not rewrite contracts for parties . . . [A] court simply cannot disregard the words used by the parties or revise, add to or create a new agreement." Hammond v. Hammond, 145 Conn.App. 607, 612-13, 76 A.3d 688 (2013); Nassra v. Nassra, 139 Conn.App. 661, 669, 56 A.3d 970 (2012). Even though the court's " musings" did not affect the court's original decision, these dicta must be corrected for the sake of clarity, consistency and the decision now before the court.
Third: Does the parties' definition of " income" include interest, dividends and capital gains from assets acquired after the dissolution?
In its " musings, " the court again erred, falling victim to the complexity of the parties' definition of income and the siren song of indoctrinated case law. Family lawyers and judges alike are keenly aware that a court may not take an income-producing asset into account in its property division and also award alimony based on that same income. Eslami v. Eslami, 218 Conn. 801, 591 A.2d 411 (1991). It is settled law that mere exchange of an asset awarded as property in a dissolution decree, for cash, the liquid form of the asset, does not transform the property into income. Simms v. Simms, 25 Conn.App. 231, 593 A.2d 161; cert. denied, 220 Conn. 911, 597 A.2d 335 (1991); Denley v. Denley, 38 Conn.App. 349, 661 A.2d 628 (1995). The sale of a capital asset in particular year is not considered income unless it is shown to reflect a steady stream of income. Gay v. Gay, 266 Conn. 641, 835 A.2d 1 (2003).
But what a court cannot do, the parties--in their prejudgment negotiation and agreement--can.
The parties and their lawyers drafted the 2010 Agreement and Stipulation for Judgment with full knowledge of these cases and their progeny. They were also aware that [a]t the time of entering a decree . . . dissolving a marriage . . . the Superior Court may assign to either spouse all or any part of the estate of the other spouse. Conn. General Statutes Section 46b-81. (Emphasis added.)
This, in relevant part, is how the parties defined income: " Income for purposes of this calculation shall be the parties' respective 'total income' that has historically been listed on line 22 (or the equivalent) of their joint 1040 federal tax returns. This shall specifically exclude all interest, dividend and capital gains income realized from assets divided as part of the property distribution component of this dissolution Judgment ." (Emphasis added.)
The parties specifically bargained and contracted for the words in their agreement. Montoya v. Montoya, 280 Conn. 605, 613, 909 A.2d 947 (2006) (" [W]e assume a deliberately prepared and executed agreement reflects the intention of the parties"). " [I]t is fundamental that parties are free to contract for whatever terms on which they may agree, and, accordingly, that [w]hether provident or improvident, an agreement moved on calculated considerations is entitled to the sanction of the law." Crews v. Crews, 295 Conn. 153, 169, 989 A.2d 1060 (2010). " It is hornbook law that courts do not rewrite contracts for parties . . . [A] court simply cannot disregard the words used by the parties or revise, add to or create a new agreement." Hammond, supra .; Nassra, supra .
Plaintiff acquired his interests in CESC and ISOI after the judgment. These interests were not part of the property distribution at the time of the judgment. The clear intent of the parties' definition of income excludes only those dividends, interest and capital gains realized from assets divided as part of the judgment. Dividends, interest and capital gains from assets acquired after the judgment are therefore included in the parties' definition of income.
The court adopts defendant's calculation of alimony due her from plaintiff in Defendant's Exhibit A.
The court is aware that some of the numbers in Defendant's Exhibit A and Plaintiff's Exhibit 1 were subject to relatively minor adjustment, but any such adjustments would not affect the overall decision of the court.
SO ORDERED.