Opinion
HHDFA054015700
01-28-2016
Theresa Hines v. David Hines
UNPUBLISHED OPINION
Filed January 29, 2016
MEMORANDUM OF DECISION RE PLAINTIFF'S MOTIONS FOR ACCOUNTING #249.00 AND #258.00 AND DEFENDANT'S CROSS MOTION FOR ACCOUNTING #251.00
Gerard I. Adelman, J.
This postjudgment matter has been before this court since the spring of 2013. The court heard three days of evidence commencing on Tuesday, May 14, 2013, and completing the hearing on Thursday, May 23, 2013. The court issued a memorandum of decision on June 25, 2013 (#285.00) . In that decision, the court detailed the postjudgment history of the matter and relied on that narrative as fully set forth herein. The issue is simple, but the solution is not. As explained in the court's 2013 decision:
In their original Agreement, the parties worked out an alimony provision which was designed to share equally the defendant's income from his various business interests. That Agreement contained various provisions developed to insure that the plaintiff had an appropriate level of support on an ongoing basis by providing her with monthly payments while protecting both parties with an end of the year adjustment based on the year's incomes. They actually spelled out the intent of the parties as the Agreement states: " It is the intention of the parties that the funds available to each from the husband's income from business and rental income shall be equal." To further this goal, the Agreement also prohibits the defendant from " reducing his income by inflating any deferred compensation, " as well as " not compensat[ing] any employee in a manner which defeats the intent and purpose of the agreement." Later in the Agreement, when discussing the ultimate sharing of the businesses, the language states: " Husband understands that he is taking on an obligation of loyalty to not defeat the intent of this Agreement--that he shall not reduce his income in any artificial manner and he shall not reduce the asset value in any manner designed to defeat the purpose of this Agreement . . . Husband shall have the same fiduciary duties toward Wife as he does towards his business partner."
Despite the lofty language and honorable intent of the Agreement, the parties have been unable to agree on what the alimony obligation was from the very first year. Hines v. Hines, Superior Court, judicial district of Hartford, Docket No. FA05-4015700-S, (June 25, 2013, Adelman, J.) (56 Conn. L. Rptr. 364, 364-65).
In addition to the defendant's income, an imputed income was developed for the plaintiff.
The 2013 decision ordered that the alimony calculation for the years in question--2008 to, and including, 2011--be calculated by a court appointed expert. The court appointed Robert Carubia as its expert and directed him to calculate the alimony award for each year based on a set of directives issued by the court in its orders. The expert's report was filed with the court on October 23, 2013. It was shared with counsel for both parties and, after a lengthy discovery period, the court held another hearing allowing the parties to examine the work of Carubia. That renewed hearing commenced on April 24, 2014, but was then continued due to some health issues with one of the attorneys. A second day for the renewed hearing was scheduled for November 12, 2014, but both parties asked for another lengthy continuance because the defendant obtained new counsel and both parties wanted an opportunity to explore alternative resolution options. The hearing was finally completed on Monday September 28, 2015. Counsel were directed to file trial briefs which were received by the court on December 23, 2015.
At the second set of hearing dates, the issue was whether the court would accept the recommendations of its expert (Court Exhibit I) on how to finalize the alimony obligations for the four years in question. As the court's expert, Carubia first testified by answering the court's questions and explaining how he went about fulfilling his charge. His calculations resulted in the defendant owing the plaintiff an additional $55, 283 for 2008, $127, 320 for 2009, the plaintiff having been overpaid by $83, 876 in 2010 and by $117, 729 in 2011 for a total net adjustment from the plaintiff to the defendant in amount of $19, 002. (Exhibit I, Appendix H as well as in the introductory letter to the court, p. i.)
Each party criticized the court's expert for not adhering to the specific instructions set forth in the decision issued in 2013. Those orders were as follows:
III. Said expert shall calculate the appropriate payments for the equalization of the alimony by applying the following rules as they apply to the Agreement as explained by the memorandum of decision issued by the court on September 25, 2009;
A. Any loans taken by the defendant from his businesses are to be counted as income for the purposes of alimony unless repaid within the same tax calendar year;
B. All tax liabilities actually paid by the parties for state and federal income taxes as well as FICA and Medicare taxes are to be deducted from gross income for that year;
C. No deductions shall be allowed for depreciation, other tax related reasons or for accounting purposes unless they are based on actual losses realized by the party regardless of whether or not such deductions are allowed by the taxing authority;
D. Any rental income or other business related income must be based on arms' length, fair market values whether or not such payment are actually being made unless in the expert's professional opinion there is an overriding business reason for accepting a lower amount . . .
The plaintiff questioned, among other things, the witness' treatment of life insurance premiums and expenses while the defendant questioned his use of, what the expert termed, " normalized income, " rather than the distributed income term used in the separation agreement which formed the basis for the judgment of dissolution.
The court's expert prepared a thorough and thoughtful report, but the court agrees with both parties that he took certain liberties in interpreting his assignment. Those liberties did vary in significant ways from the court's direction and while the court views the expert's work as being well intentioned, and perhaps even a more correct accounting view of the situation, it is not what the court ordered. Because of that variance with the direction of the 2013 orders, the court does not accept the expert's calculations.
In addition to the court's expert, each party called experts of their own. On the first day of the hearing, the plaintiff called Joseph A. DeCusati, who had also testified at the hearings in 2013. He offered his own calculation of the alimony adjustment based on the court's 2013 orders. DeCusati was recalled at the second day of the hearings, which was held some seventeen months after the first day, and he testified that he had made an error in his calculations in 2014; an error that when corrected favored the defendant. It should be noted that when DeCusati was cross examined by the defendant in 2014, this error was not discovered by the defendant and, thus, was not part of the questioning. DeCusati raised the error on his own and, through counsel, advised the defendant of the mistake and the corrected calculation. That correction amounted to a $231, 938 reduction in the amount of alimony adjustment claimed by the plaintiff.
The original adjustment amount claimed by the plaintiff based on DeCusati's work was $661, 555. His corrected amount, as testified to during the 2015 continued hearing, was $429, 617.
The plaintiff, as the moving party, called her witnesses first so it is unknown whether the defendant's experts discovered the calculation error prior to being notified by the plaintiff's counsel and DeCusati. Nevertheless, the candor exhibited by the plaintiff's counsel and her expert is appreciated by the court and is demonstrative of their effort to have a fair resolution of the dispute. The court had found DeCusati's expert testimony at the 2013 hearing to be quite helpful and that conclusion was only enhanced during his testimony in 2014 and especially in 2015. The court finds his testimony to be convincing and in line with the orders of the court's 2013 decision.
The defendant continues to raise as an issue his disagreement with the 2013 decision. During the hearings, the court ruled several times that those orders and the direction with which the alimony calculation was to be made had been resolved. The court considers its 2013 orders as being a final order, not an interlocutory order. The only issue to be decided at the hearings held after the 2013 orders was to determine the exact amount of the calculation based on the orders issued which directed the method under which such calculation was to be made. The method had been set and was no longer an issue before the court.
The defendant's arguments are based on his view that the 2013 orders are simply the " law of the case" and he cites his research to support his position that the court is not completely bound by that. The court disagrees. The 2013 decision was the result of three days of hearings during which several experts testified on the issues and numerous exhibits were entered into evidence. It was not some evidentiary ruling from the bench that the court is being asked to reconsider in light of new circumstances. The arguments being raised by the defendant are the same arguments that were made then. They relate primarily, but not entirely, to the use of depreciation by the defendant in the running of his businesses. The court spent considerable time and effort to deal with that issue in its 2013 decision and, in fact, the greater part of that decision dealt with the issue of depreciation. As was repeatedly stated from the bench during the latter hearings, that issue has been decided and will not be reopened. The defendant elected not to appeal that decision. The court views the matter closed and relies on its orders issued in June 2013.
In reaching this conclusion, the court relies on Connecticut Supreme and Appellate Court precedent. In Ahneman v. Ahneman, 243 Conn. 471, 479, 706 A.2d 960 (1998), the Supreme Court stated that, " [i]t is well established that a ruling by a trial court regarding issues in a marital dissolution case--whether it be a pendente lite ruling, a ruling issued in conjunction with a final dissolution judgment or a decision regarding a postjudgment motion--is a final judgment for purposes of appeal." Also in Kupersmith v. Kupersmith, 146 Conn.App. 79, 93-94, 78 A.3d 860 (2013), the Appellate Court stated that " [t]he judgment rendered in an action for dissolution of a marriage is final and may not be opened or set aside unless a motion to do so is filed, pursuant to Practice Book 326 [now § 17-4], within four months from the date of its rendition . . . After that period, absent waiver, consent or other submission to jurisdiction, a court lacks the power to modify or correct a judgment other than for clerical reasons . . . A judgment rendered may be opened after the four month limitation if it is shown that the judgment was obtained by fraud, in the absence of actual consent, or because of mutual mistake . . . Unless a litigant can show an absence of subject matter jurisdiction that makes the prior judgment of a tribunal entirely invalid, he or she must resort to direct proceedings to correct perceived wrongs in the tribunal's conclusive decision . . . A collateral attack on a judgment is a procedurally impermissible substitute for an appeal." (Citation omitted; internal quotation marks omitted.)
After the hearing held on April 24, 2014, the defendant filed another postjudgment motion (#297.00) asking for the court to determine equity interests and determine alimony liability as well as to reopen the judgment to clarify, modify, and conform the judgment to the agreement of the parties. No evidence nor argument was offered regarding this motion at the subsequent hearing and the court considers the motion to be abandoned.
Having considered the testimony received during the hearings held on April 24, 2014 and September 28, 2015, having reviewed the various exhibits entered into evidence, having considered the posttrial briefs filed by each party, and having considered such evidence and argument in light of the court's decision of June 25, 2013, the court makes the following findings of fact:
A. The decision issued on June 25, 2013, was a final decision of the court on the issue of how the alimony adjustment calculations should be made for the years 2008-2011; B. The report and calculation of the court appointed expert was not in accordance with the directions of the court as issued on June 25, 2013; C. The report and calculation of the plaintiff's expert as revised (plaintiff's exhibit #2 submitted on September 28, 2015) is in compliance with the court's orders of June 25, 2013; D. The adjustment of the alimony payment for the year 2008 is $258, 926 from the defendant to the plaintiff; E. The adjustment of the alimony payment for the year 2009 is $135, 048 from the defendant to the plaintiff; F. The adjustment of the alimony payment for the year 2010 is $48, 260 from the defendant to the plaintiff; G. The adjustment of the alimony payment for the year 2011 is $12, 615 from the plaintiff to the defendant; H. The net adjustment for the four years 2008-2011 is $429, 619 from the defendant to the plaintiff; I. The fees for the court's expert totaled $12, 300 inclusive of his testimony at the hearing; and J. The expert's billing records indicate that based on the court ordered division of responsibility for said fees (plaintiff 40% and defendant 60%) the outstanding balances as of January 6, 2016, owed by the plaintiff was $780 and by the defendant was $2, 520. In light of the findings of the court enumerated above and in consideration of the applicable statutory criteria as explained by our case law, the court hereby
ORDERS:
I. The plaintiff's motions for an accounting #249.00 and #258.00 as well as the defendant's motion for an accounting #251.00 are granted;
II. The defendant is ordered to pay to the plaintiff the sum of $429, 619.00 as the net adjustment to his alimony obligations for the years 2008-2011;
III. The plaintiff is ordered to pay to the court expert the balance owed of $780 on or before March 1, 2016;
IV. The defendant is ordered to pay to the court expert the balance owed of $2, 520 on or before March 1, 2016;
V. The parties are ordered to prepare current financial affidavits and file them with the court no later than March 1, 2016;
VI. The defendant is ordered to prepare and submit his proposal for payment of the alimony adjustment no later than March 15, 2016;
A. The plaintiff shall respond to said proposal by either accepting it or objecting to it no later than April 1, 2016;
B. In the event the proposal is not accepted, the court will schedule a hearing on the issue of a payment order at its earliest convenience; and
VII. No orders regarding the defendant's motion #297.00 are entered as the issues raised in said motion were not pursued at the hearing.