Opinion
No. 90-054449S
June 13, 2005
This decision addresses postjudgment motions filed by the plaintiff (hereafter, Ms. Hutchings) to enforce the 1993 judgment dissolving the parties' marriage, by the defendant (hereafter, Dr. Hutchings) to modify the judgment, and by the plaintiff and the attorney for the minor children for counsel fees. The parties initially appeared with counsel for hearing on these motions on three days in October 2002, November 2002, and April 2003. After reviewing the written separation agreement of the parties that had been incorporated into the judgment, the court found that a term critical to resolving the pending motions was ambiguous and opened the evidence for a supplemental hearing to determine the parties' intention regarding that term. After delay occasioned by illness of one of the parties, the hearing resumed on April 12, 2005, after which the parties filed written briefs. For the reasons stated below, the defendant's motions to modify or terminate alimony (#'s 216 and 232) are denied; his motion to modify child support (#214) is denied although by agreement of the parties child support is modified as described herein; the plaintiff's motions for findings of contempt are granted; and the motions for payment of counsel fees are granted.
I — ISSUES PRESENTED
Pursuant to a written separation agreement of the parties, the judgment ordered Dr. Hutchings to pay alimony and child support to Ms. Hutchings of 20% and 42%, respectively, of his net income. The judgment further ordered Dr. Hutchings, pursuant to the separation agreement, to pay one-half of "all reasonable and necessary unreimbursed" health expenses for the parties' three minor children and directed Ms. Hutchings not to incur "extraordinary" health expenses for the children "without prior consultation with the Husband, except in cases of emergency."
In her motions for contempt, Ms. Hutchings claims that Dr. Hutchings has not paid the full amount of alimony, child support and unreimbursed health expenses ordered by the judgment. Dr. Hutchings' motions to modify alimony and child support claim a substantial change in circumstances and that the child support order does not comply with the child support guidelines. Dr. Hutchings also seeks to terminate alimony on the grounds of cohabitation. Finally, the plaintiff and counsel for the minor children seek orders for payment of their fees.
II — DISCUSSION A. The Separation Agreement
The separation agreement of the parties provides for Dr. Hutchings to pay 42% and 20% of his "net income" as child support and alimony. The agreement defines the term "net income" twice, in Article 2.2 pertaining to child support and in Article 4.1 pertaining to alimony. Although containing minor differences in wording, the two definitions do not differ in substance: "Net income . . . shall be defined as gross income from employment and/or self-employment from all sources less federal and state income tax deductions, Social Security and Medicare deductions" and mandatory medical insurance deductions for insurance coverage for the minor children. In a previous decision this court held that this definition is ambiguous and opened the evidence for further hearing on the parties' intent in order to interpret and apply the agreement. At the supplemental hearing held in April 2005, the parties each introduced evidence on what they claimed that they had intended by the terms "net income" and "less federal and state tax deductions" in the separation agreement. As the court noted in Geddie v. Cattle Co., 49 Conn.App. 265, 271 (1998), "[e]vidence concerning the intention of the parties may be found in the conduct and language of the parties and the surrounding circumstances."
The only variation between the two definitions lies in the wording of the deduction from earned income for the costs of insurance coverage for the minor children. Italicized below are the differences between the wording in the two definitions:
Article 2.2: "Social Security and Medicare deductions and mandatory medical insurance deductions only for insurance coverage for the benefit of the minor children of the parties."
Article 4.1: "Social Security and Medicare deductions as well as any mandatory medical insurance deductions only for the parties' minor children."
These minor deviations in wording do not affect the substantive meaning of the agreement — that Dr. Hutchings' expenses for medical insurance for the minor children would be deductible from his gross earned income for purposes of determining his net income, but not expenses he incurred for medical insurance for himself or others.
Attorney Carlo Forzani, who represented Ms. Hutchings in the original dissolution action and participated in negotiating and drafting of the separation agreement, was the first witness at that hearing. He testified credibly that the purpose of the language in the separation agreement was to allow Dr. Hutchings to subtract his actual tax liability from his total earned income before calculating his alimony and child support liabilities. Ms. Hutchings testified next, and she too was credible in her testimony that her purpose and intent in the separation agreement had been to maximize her husband's child support and alimony obligations by basing them on his tax liability for each year. She acknowledged that twelve years after the original judgment she no longer fully understands the formula used in the exhibit and example contained in the separation agreement, but testified that her attorney had fully explained these terms and the agreement to her at the time of the dissolution.
Finally, Dr. Hutchings testified that at the time of Judgment he understood the agreement to mean that he could base his child support and alimony payments on percentages of his net periodic pay stubs. His position was that gross employment income less federal and state tax deductions meant that alimony and child support would be based on the amount that his periodic paycheck treated as his gross earnings less the amounts withheld from his paycheck for federal and state taxes. Dr. Hutchings' testimony obviously contradicts that of Ms. Hutchings; and after considering his testimony in light of all the other testimony and evidence to determine his intent in entering into the agreement he signed on the day of his dissolution, the court finds that his testimony at the supplemental hearing as to his intent is not credible. It is more likely that his testimony was an after-the-fact rationalization of his conduct over the next several years, during which, without a copy of the judgment, which had been sealed by the court, to guide his conduct, he withheld more in taxes than was required to meet his tax liabilities and did not pay alimony or child support on the excess withholding. In 1996, he also began diverting earnings to a 403(b) account and did not pay alimony or child support on the deferred compensation. Nothing in the language of the judgment to which he agreed, however, would have reasonably allowed him to believe that he could voluntarily cause his employer to withhold more money from his earnings than his actual tax liability, thereby reducing his net paycheck with the end result of also reducing his alimony and child support obligations. And regardless of what the term "less federal and state tax deductions" might mean, the judgment language was clear, unequivocal, and unambiguous that the starting point for calculating alimony and child support obligations was gross employment income, not gross taxable employment income.
The testimony presented at the supplemental hearing, together with all the evidence previously presented, resolves any ambiguity in the separation agreement. It is absolutely clear from the parties' testimony that neither of them intended the term to mean tax deductible expenses or costs, and neither of them so claimed at the hearing. Moreover, the court also finds that neither of the parties intended the term to mean tax withheld from gross employment income. From the totality of the evidence, the court finds that the parties intended the term "less federal and state income tax deductions" to mean that Dr. Hutchings' state and federal income tax liabilities on his earnings were to be deducted from his gross employment income for purposes of determining alimony and child support.
The only reason that this court previously found the original agreement to be unclear was that the computation of alimony in an exhibit appended to the agreement did not equal 20% of gross employment income less his tax liabilities shown on that exhibit. Article 4.1 of the separation agreement provided that alimony would be 20% of net income. The article then contained an example of how to compute alimony, obviously intended to aid interpretation of the agreement. The example stated that "[d]educting federal and state taxes, social security and medicare as projected on Exhibit 1 annexed hereto results in annual alimony . . . of $16,500." This language obviously contemplates that the term "gross employment income less federal and state income tax deductions" meant that Dr. Hutchings' actual tax liabilities would be subtracted from his gross earnings for purposes of calculating alimony and child support. The entire rest of the agreement, read together, supported the conclusion that the parties intended net income to mean gross earnings less tax liabilities (and other expenses whose meaning has never been in dispute).
The exhibit attached to the agreement is reproduced in the appendix to this decision.
Both Article 4.1 and the exhibit stated that alimony of $16,500 would result from applying the separation agreement formula to the numbers listed in the exhibit. What led the court to conclude that the agreement was ambiguous was that actually performing the mathematical computations called for in the agreement on the numbers listed in the exhibit — i.e., by adding up the numbers listed in the agreement for state and federal taxes, social security, and Medicare, subtracting the sum of those numbers from the amount listed in the agreement as gross employment income, and then multiplying the difference by .42 — does not result in the number $16,500. Applying the separation agreement formula (28% of gross earned income less income taxes, FICA and Medicare) to the hypothetical numbers listed in the exhibit yields an alimony calculation of $16,188, not $16,500. The amount of child support listed on the exhibit, on the other hand, is 42% of the amount listed in the exhibit as gross earned income less income taxes, FICA and Medicare. Thus, the amounts that the exhibit lists for alimony and child support are not 20% and 42% of the same number. The amount listed for alimony, $16,500, is 20% of $82,500. The amount listed for child support is 42% of $80,858, which is the difference between the amounts listed on the exhibit as Dr. Hutchings' "gross employment income" less his "total taxes."
Nobody ever offered any explanation at the supplemental hearing for the $16,500 figure, which bears no relationship this court can discern to any of the possible interpretations of the judgment language. At the supplemental hearing, Dr. Hutchings testified that several years later, after finally obtaining a copy of the judgment, he discovered that the language in the judgment did not correspond to his understanding of the agreement; and it was from this testimony, combined with all the other evidence, that the court now infers the explanation for what happened. Dr. Hutchings thought he knew what the judgment ordered until he saw it again several years later; and after that, he testified, he believed the judgment was ambiguous. Although he did not testify about specifically what he regarded as ambiguous, since the only possible ambiguity is that alimony listed did not correspond to the actual alimony calculation, this is obviously what he meant by the judgment being ambiguous. But in light of the parties' testimony at the hearing about their intent, the actual language used in the agreement, the possible ways that language could reasonably be construed, and all the other evidence offered, the court draws a different conclusion from the fact that this part of the judgment did not correspond to what Dr. Hutchings thought he had agreed to. After considering the evidence at the supplemental hearing, along with the evidence from the original hearing, this court now concludes that the $16,500 figure resulted from arithmetic error. That erroneous computation of alimony did not reflect the parties' intent. The parties intended for alimony and child support to be calculated from the difference between Dr. Hutchings' gross employment income and his tax liabilities (and certain other expenses not in dispute). The language of their agreement supports that interpretation in all respects, except for the unintentional discrepancy between the alimony listed and the actual alimony calculation.
B. Defendant's Motions to Modify Alimony and Child Support
Dr. Hutchings' motions to modify alimony and child support claim that his "financial circumstances have changed substantially" since the original orders because he is earning more now and has incurred additional financial obligations as the result of remarrying and having two children with his current wife. Under § 46b-86(a) of the General Statutes, the court may modify any final order for the periodic payment of permanent alimony or support "upon a showing of a substantial change in the circumstances of either party" since entry of the court's last such order. The party seeking the modification, here Dr. Hutchings, bears the burden of demonstrating that such a change has occurred. Bunche v. Bunche, 180 Conn. 285, 290, 429 A.2d 874 (1980).
1. Alimony
If the court finds a substantial change in circumstances, the court may then consider modifying alimony based on the criteria set forth in General Statutes § 46b-82. "[A]lthough the trial court may consider the same criteria used to determine the initial award `without limitation,' in doing so, its inquiry is necessarily confined to a comparison between the current conditions and the last court order." (Citations omitted.) Borkowski v. Borkowski, 228 Conn. 729, 730, 638 A.2d 1060 (1994). Ultimately, the court here must decide whether "circumstances have changed since the last court order such that it would be unjust or inequitable to hold either party to it." Id., 737-38.
A financial affidavit that Dr. Hutchings filed in September 1993, a month before the divorce, showed gross earned income of $2,116 per week and net weekly income, after payroll deductions for state and federal taxes, of $1,309. A financial affidavit he introduced into evidence at the present hearing claimed gross earned income of $2,908.92 per week, and net weekly income, after deducting state and federal withholding tax, of $1,786.82 per week. The court does not find these financial affidavits to be reliable statements of his actual gross or net income, however. Over the years Dr. Hutchings has consistently over-withheld from his earned income and had a tax refund or credit the following year. Moreover, he admitted at the hearing that at least one of the financial affidavits he filed did not include bonus income, which he testified that he has received in various years. The court concludes, therefore, that Dr. Hutchings' income tax returns are the most reliable documentary evidence of his actual income. From those returns, the court finds that his gross and net incomes have probably increased since the 1993 judgment; but, because the court does not have any information on whether bonus income was or should have been included on his 1993 financial affidavit, the court is unable to determine by how much.
The increase in his income does not necessarily constitute a substantial change in circumstances, however. The judgment ordered Dr. Hutchings to pay a fixed percentage of his net income as alimony and child support. It ordered the parties to exchange income tax returns each year "for purposes of confirming the amount of child support . . . and alimony owed . . ." The parties clearly contemplated that Dr. Hutchings' income and, hence, the amount of child support and alimony he owed, might vary from year to year. It was the obvious intention of the parties' agreement that Ms. Hutchings, an ex-spouse of a physician to whom she had been married for twelve years, would benefit from the increased income that a physician might reasonably expect during his career. Dr. Hutchings' increased income since then has enabled him to purchase a home and contribute more than one hundred thousand dollars to a retirement find. Ms. Hutchings owns no home and has no retirement savings. Because of health problems, she cannot work full-time.
Dr. Hutchings testified that his remarriage and the financial obligations arising therefrom also constitute a substantial change in his financial circumstances. Such a voluntary assumption of new financial obligations cannot ordinarily be the sole basis for modifying an alimony order. See Battersby v. Battersby, 218 Conn. 467, 472 n. 8, 590 A.2d 427 (1991) ("Financial hardships that result from a remarriage may be considered on a motion for modification, although they are not alone sufficient to justify the need for a modification. Riccio v. Riccio, 153 Conn. 317, 320, 216 A.2d 431 (1966); Lev v. Lev, 10 Conn.App. 570, 573, 524 A.2d 674 (1987)"). Dr. Hutchings claims that this case is different, however, because his alimony and child support obligations are based on his after-tax income. He correctly points out that his subsequent remarriage gave him the right to pay taxes at a lower rate and also gave him at least one additional exemption. As a result of the lower tax rate, he owes fewer taxes on his earned income, as a consequence of which his "net income" is greater and he owes more alimony and child support. He claims that this is unfair and a substantial change of circumstances entitling him to a modification, but the agreement in this case shows that the parties specifically contemplated Dr. Hutchings' eventual remarriage and the resulting effect of his tax liability. The hypothetical situation portrayed in exhibit one in the appendix to the agreement specifically listed him as "married, filing jointly," thus showing that the parties contemplated that any tax benefit resulting from his remarriage would be shared by both parties to this action. Although the law no longer requires that a change in circumstances be uncontemplated at the time of dissolution to permit a modification of alimony, the circumstances here show that the parties specifically intended for Ms. Hutchings to benefit from any tax savings resulting to Dr. Hutchings because of remarriage.
On the overall facts, therefore, the court does not find a substantial change of circumstances. Moreover, considering the criteria for setting and modifying alimony in accordance with Borkowski v. Borkowski, supra, 228 Conn. 729, the court cannot conclude that circumstances have so changed since the last court order "that it would be unjust or inequitable to hold either party to it." Id., 737-38.
Dr. Hutchings also seeks to modify alimony on the grounds of cohabitation. As Ms. Hutchings correctly points out, the agreement here permitted termination of alimony if she remarried, but not on the mere basis of cohabitation. See Wichman v. Wichman, 49 Conn.App. 529, 535, 536, 714 A.2d 1274, cert. denied, 247 Conn. 910, 719 A.2d 906 (1998) (trial court properly denied motion to modify the judgment based on cohabitation "when the decree unambiguously precludes modification for any reason other than remarriage or death"). Moreover, Dr. Hutchings did not prove cohabitation here. Thus, the motion to modify or terminate alimony is denied.
2. Child Support
Dr. Hutchings' motion to modify child support is also governed by § 46b-86(a) of the General Statutes, whose relevant portions provide as follows:
[A]ny final order for the periodic payment of . . . support . . . may at any time thereafter be continued, set aside, altered or modified by said court upon a showing of a substantial change in the circumstances of either party or upon a showing that the final order for child support substantially deviates from the child support guidelines established pursuant to section 46b-215a, unless there was a specific finding on the record that the application of the guidelines would be inequitable or inappropriate. There shall be a rebuttable presumption that any deviation of less than fifteen per cent from the child support guidelines is not substantial and any deviation of fifteen per cent or more from the guidelines is substantial.
Dr. Hutchings' motion to modify child support claims that the child support order was and is not in accordance with the child support guidelines. The motion was served on Ms. Hutchings on June 27, 2000. The parties' oldest child turned 18 on July 8, 2001, and the parties stipulated before the court that child support should be modified as of that date to reflect this child's reaching the age of majority. (Trans. 10/8/02, p. 28.)
When Ms. Hutchings testified before this court in November 2002, she had been earning $25,000 per year for two years. There is no evidence about what her pay was before that, but as of November 2000 the parties' combined net weekly incomes exceeded $2,500, which is the income ceiling for the child support guidelines. The court is therefore not bound to apply the guidelines and "remain[s] free to fashion appropriate child support awards on a case-by-case basis, provided the amount of support prescribed at the $2,500 level is presumed to be the minimum that should be ordered." Child Support and Arrearage Guidelines, preamble, § (d)(7), p. iii. Thus, the court rejects Dr. Hutchings' claim that child support must be modified because it deviates from the guidelines, which are not applicable to the parties because of their incomes.
The only other basis that the defendant's motion to modify claims as a justification to reduce child support order is his claim, already rejected by the court, of a substantial change in financial circumstances. Nonetheless, the parties have agreed that the their eldest child has reached age eighteen and that child support should be modified for that reason. The parties' original agreement was that Dr. Hutchings would pay 42% of his net income for child support. The top of exhibit one, appended to the separation agreement, contains the notation "14% of Net Income per Child for Child Support." That notations shows the parties' clear intent that the child support order award was 14% of net income for each minor child. The child support order therefore is modified, effective James's eighteenth birthday on July 8, 2001, such that defendant shall thenceforth pay 28% of his net income, as defined in the separation agreement and clarified in this decision, as child support for the two remaining minor children.
C. Plaintiff's Motions for Contempt 1. Alimony and Child Support a. Contempt
Ms. Hutchings claims that Dr. Hutchings has underpaid his alimony and child support obligations. Since the dissolution, Dr. Hutchings has made regular alimony and child support payments to her. For a long time he based his payments on the judgment percentages of his gross regular wages less the following: withholding for state and federal income taxes, FICA and Medicare and payments for his children's health insurance. When he received a bonus check, he would send Ms. Hutchings judgment percentages of the bonus less these same deductions. He never paid her the judgment percentages of state or federal income tax overpayments or refunds. Until October 2000, he also never paid her the judgment percentages of his pre-tax contributions to his 403(b) fund. In October 2000, Dr. Hutchings tendered to Ms. Hutchings two checks for $3,800 and $7,980 as the judgment percentages of his contributions to his 403(b) fund from the dissolution until then, but she returned the checks to him without cashing them. After March 2001, when Dr. Hutchings believed that the parties' oldest son had turned eighteen years old, he reduced the percentage he was paying for child support from 42% to 28%, thereafter making regular payments to Ms. Hutchings of 20% and 28% of his take-home paycheck. From this evidence the court finds that defendant did not fully meet his child support and alimony obligations. He failed to pay the required percentage of his contributions to his 403(b) fund until October 2000. He never paid the required percentages of excess tax withholding. He unilaterally reduced his payment for child support, in violation of the agreement.
Both parties testified that they did not have a copy of the judgment for several years after the dissolution of their marriage. The court file shows that the court, Dranginis, J., ordered the parties' written stipulation of October 14, 1993, sealed on the day of the dissolution. Both parties testified credibly that they did not receive copies of the judgment until five years afterward, at which time each became aware of certain obligation imposed by the judgment that they had misunderstood or forgotten.
The parties gave conflicting testimony on the amount of alimony and child support paid by Dr. Hutchings between 1994 and 2001. Dr. Hutchings claims that he paid $149,261.25 in alimony and $313,924.94 in child support, for a total of $463,186.19, during this period to Ms. Hutchings. This amount includes the two checks of $3,800 and $7,980 that he paid her in 2000 and that she returned. Ms. Hutchings claims that from 1994 Through 2001 Dr. Hutchings paid $144,858.91 to her in alimony and $302,510,00 in child support, for a total of $447,368.91. This amount does not include those two checks. Dr. Hutchings' numbers would have him paying more in alimony and child support during these years than he actually owed. Since he has admitted, and the court also found, that he never paid alimony or child support on income tax refunds or credits, the court does not find Dr. Hutchings' numbers as to the amount he paid credible and finds plaintiff's claims as to the amounts she received credible.
Noncompliance with a court order, however, does not necessarily dictate that a finding of contempt be entered. Marcil v. Marcil, 4 Conn.App. 403, 405, 494 A.2d 620 (1985). For example, inability to comply is a good defense to a claim of contempt. Mallory v. Mallory, 207 Conn. 48, 57, 539 A.2d 995 (1988). "It is within the sound discretion of the court to deny a claim of contempt when there is an adequate factual basis to explain the failure." Marcil v. Marcil, supra, 4 Conn.App. 405. The burden of establishing inability to comply with the court's order rests on the person shown not to be in compliance. Eldridge v. Eldridge, 244 Conn. 523, 532, 710 A.2d 757 (1998). "The lack of any basis or explanation, however, should reasonably allow the conclusion that the contemnor has the ability to comply with the order of the court." Bunche v. Bunche, supra, 36 Conn. 326. Mere failure to understand one's obligations, even those imposed by an ambiguous separation agreement, does not preclude a finding of contempt. Sablosky v. Sablosky, 258 Conn. 713, 718, 784 A.2d 890 (2001). On the other hand,
[a] good faith dispute or legitimate misunderstanding of the terms of an alimony or support obligation may prevent a finding that the payor's nonpayment was wilful. This does not mean, however, that such a dispute or misunderstanding will preclude a finding of wilfulness as a predicate to a judgment of contempt. Whether it will preclude such a finding is ultimately within the trial court's discretion.
Id.
Numerous circumstances from 1993 through 1998 mitigate against a finding of wilfulness with regard to defendant's failure to pay the required percentages of his 403(b) contributions or tax refunds during that period. The judgment was not prepared until early 1998, and the separation agreement itself was sealed at the time of the dissolution and not unsealed until the hearing began on the pending motions. For several years, neither party had a copy of the original separation agreement, and both had to wait until the judgment had been prepared and approved by the court to receive a copy. Dr. Hutchings knew that Ms. Hutchings relied on her father, a tax attorney and certified public accountant who had participated in the drafting of the separation agreement, to understand the parties' obligations under the agreement and to assess their compliance with those obligations. For a few years after the dissolution, Dr. Hutchings sent Ms. Hutchings copies of his income tax returns, from which Ms. Hutchings and her father could easily have determined that the amount of alimony and child support she was receiving did not correspond to the judgment; but she never notified him that he was underpaying his obligations. Although Dr. Hutchings might have understood the meaning of the judgment on the day of the divorce, without a copy of the judgment he also might reasonably have become confused, given its complexity, about his obligations afterward. Ms. Hutchings' silence in response to his underpayment of his obligations probably also resulted from the same confusion. Thus, at least until the judgment became available, this was not a case like Sablonsky, where a party resorts to self-help on an ambiguous judgment, but a situation where one party might reasonably have construed the other party's failure to object to the amount of his payments as acquiescence in his mistaken understanding of the judgment obligations. The court finds that these circumstances provide an adequate factual basis to explain Dr. Hutchings' failure to pay the correct amount of alimony and child support before he received a copy of the judgment.
Dr. Hutchings did not obtain a copy of the judgment until April 1999. He said at the hearing here that after he saw the judgment he believed it was ambiguous as to the method of calculating his alimony and child support. He should have, at that point, filed a motion for clarification of any terms that he claimed were ambiguous, but did not do so. A year and a half later, in October 2000, he mailed checks to Ms. Hutchings for the judgment percentages of contributions to his 403(b) fund since the dissolution. His doing so then shows a realization on his part that, under the judgment, he could not divert earnings from his paycheck and thereby reduce his child support and alimony obligations. At that point, he should have been aware that not paying the judgment percentages on over-withheld taxes that resulted in tax refunds or tax credits also violated the agreement. The court thus finds that there is no lawful or legitimate excuse or justification for Dr. Hutchings' failure to pay the amounts of alimony and child support required by the judgment, as construed herein, after he obtained a copy of the judgment.
The court must next consider whether Dr. Hutchings is in contempt for unilaterally reducing his child support payments 42% to 28% of his net income in March 2001, when he believed the parties' oldest child turned 18. There is no doubt that he was in contempt for doing so before the child actually turned 18 the following July, and the court so finds. The only real issue here is whether he was entitled to cut his child support payments when the child actually turned 18. Article 2.8 of the agreement directed Dr. Hutchings to pay forty-two per cent of his net income as child support. It contained no specific date for child support to terminate; but, under the law in effect at the time of the October 1993 dissolution, child support could not be ordered past a child's age of majority in the absence of a explicit written agreement between the parties to that effect. Miller v. Miller, 181 Conn. 610, 613-14, 436 A.2d 279 (1980) (Public Act 94-61, authorizing child support for an eighteen-year-old still living at home and in high school, did not become law until the following year). Under our laws, therefore, Dr. Hutchings was no longer under a legal obligation to pay child support for that child when he turned 18.
The top of exhibit one appended to the separation agreement states "14% of Net Income per Child for Child Support." That notation explained how the parties arrived at the figure 42% of net income for child support of their three minor children at the time of dissolution. It provided a reasonable basis for the defendant to believe that the separation agreement intended for child support to be automatically reduced by a pro rata percentage as each child turned age 18.
When, as part of a divorce decree, a parent is ordered to pay a specified amount periodically for the benefit of more than one child, the emancipation of one child does not automatically affect the liability of the parent for the full amount. The proper remedy, if the full amount is deemed excessive, is to seek a modification of the decree.
The reason for considering a single amount to be paid periodically for the support of more than one child as not subject to an automatic pro rata reduction is twofold. First, a child support order is not based solely on the needs of the minor children but takes into account what the parent can afford to pay. Consequently, a child support order may not accurately reflect what the children actually require but only what the parent can reasonably be expected to pay. To allow an automatic reduction of an undivided order would be to ignore the realities of such a situation. Second, to regard an undivided child support order as equally divisible among the children is to ignore the fact that the requirements of the individual children may vary widely, depending on the circumstances.
Unless there is a clear indication to the contrary, the support order of the court, unless modified, is intended to continue in full force until the youngest child becomes emancipated.
(Citations omitted.) Delevett v. Delevett, 156 Conn. 1, 3-5, 238 A.2d 402 (1968). The court finds that this notation provided the "clear indication" mandated by Delevett that the parties did not intend the support order to remain at 42% of net income until modified by judicial decree. The court thus declines to hold Dr. Hutchings in contempt for his unilateral reduction of child support payments when the child turned 18.
b. Arrearages
In order to determine the amount by which Dr. Hutchings has underpaid his alimony and child support obligations, the court must ascertain his net income for each year since the dissolution, the amount he was required to pay as alimony and child support, and the amount he paid. Determining his net income for a particular year requires the court to ascertain his federal and state income taxes for that year. At the hearing, Ms. Hutchings offered the testimony of her father, Richard Cummings, whom she had disclosed as an expert witness, as to defendant's alimony and child support obligations. Dr. Hutchings filed a motion in limine, citing Weinstein v. Weinstein, 18 Conn.App. 622, 561 A.2d 443 (1989), to disqualify Cummings from testifying as an expert on the grounds of bias based on his relationship to Ms. Hutchings. Unlike the proposed witness in Weinstein, however, Cummings was eminently qualified, from a professional and expertise perspective, to serve as an expert witness. From the voir dire of Cummings on the defendant's objection and the other testimony, it was also evident that Cummings had been very much involved in the preparation of the settlement agreement, might have useful information to assist the court about the events leading up to the judgment, was, hence, a legitimate fact witness, and that any bias of his could be properly explored on cross-examination, weighed by the court, and did not prevent his testimony from being helpful to the court. The court thus denied the motion in limine to preclude his testimony, but made no finding that Cummings was qualified as an expert and informed the parties it would proceed on a question-by-question basis as to objections. (Trans. 11/20/02, p. 67.)
Through Cummings, the plaintiff introduced a chart into evidence as her exhibit nine to illustrate her claims about defendant's obligations under the judgment. After redaction conforming to a limited objection of the defendant, the chart, plaintiff's exhibit nine, was admitted into evidence without further objection. See Trans. 11/20/02, p. 81. From 1994 through 1998, years during which Dr. Hutchings filed his income tax returns as a single person, the chart subtracts from his gross wage income a portion of state and federal taxes that the chart describes as "attributable to wages." Thus, in 1994, he had wage income of $123,756 and an additional $30.72 of dividend income. His total federal and state income tax obligations that year were $23,964 and $7,503, respectively. For calculating net income, the chart subtracts from wage income a percentage of income taxes based on the ratio of wage income to total income. Plaintiff's exhibit nine used this same procedure for each year. For 1999 through 2001, when defendant filed a joint tax return with his new wife, who also had earned income, the chart in that exhibit calculated defendant's net income by deducting from his wage income the percentage of total state and federal taxes owed by defendant and his wife that corresponded to the ratio of defendant's earned income to the couple's total income.
The court did not find Cummings's testimony or chart particularly helpful, however. He claimed that the chart he presented correctly calculated Dr. Hutchings' net income each year for purposes of calculating child support and alimony. The chart was computer-generated and Cummings did not fully explain the bases of certain assumptions or calculations that he or the computer software program had made. Certain of the calculations were based on subjective judgment calls that Cummings did not fully explain. In addition, the chart did not list the actual taxes that Dr. Hutchings paid each year but instead the amount that Cummings maintained was Dr. Hutchings' correct tax liability for each year. Cummings testified that in certain years the tax liability shown on Dr. Hutchings' tax returns did not accurately reflect his true tax liability because, Cummings claimed, Dr. Hutchings had made certain omissions or mistakes on his tax returns — for example, by not claiming children as dependents in certain years although the judgment had allowed him to do so and by miscalculating his New York State income tax. Dr. Hutchings' 1985 New York State tax return, entered into evidence as part of plaintiff's exhibit two, reported his New York State income tax that year as $8,487; but Cummings' chart listed the defendant's 1985 state income taxes as $7,399. Cummings also corrected the defendant's state income tax liability for the following three years.
Although the court recognizes that an expert may base a conclusion on information not admissible in court and need not inform a court of every factual foundation for its expert opinion, a court is not bound by an expert's opinion testimony. Without the underlying factual bases upon which Cummings based his conclusion as to the 1985 state tax liability, this court has no way to evaluate the reliability or validity of Cummings' "corrections" of his former son-in-law's tax liability for that year. Each of the changes to the defendant's state tax liability had the effect of reducing his taxes and thereby increasing his "net income" and the plaintiff's percentage shares thereof. Although Cummings disclaimed any bias in favor of his daughter, the possibility of bias and his obvious identification with his daughter's position gave the court little confidence in his "corrections," in the absence of detailed explanation as to how he had calculated each one. Thus, the court did not find his testimony helpful on how he analyzed Dr. Hutchings' tax liability each year, and gives no weight thereto. As Cummings was in frequent contact with his daughter over the years and monitored the payments she received from her ex-husband, on the other hand, the court did find informative his testimony on the payments that Dr. Hutchings made for alimony, child support, and medical insurance premiums for his children.
The court has instead made its own findings as to Dr. Hutchings' income and his tax liability for each year based on his state and federal income tax returns for 1994-2001, all of which were introduced into evidence. From those returns, the court determined his gross total income, gross employment income and state and federal income taxes for each year since 1994. For the years 1994 through 1999, when defendant filed his tax returns as a single taxpayer, he had both earned and unearned income and his taxes were based on both. For the years 1999 through 2001, defendant filed a joint return with his new wife; and the taxes they owed to state and federal authorities were based on earned income that each had as well as their unearned income. The returns do not specify the amount of state and federal taxes due just on his earnings. Nothing in the separation agreement, the example it contains, or the exhibit to which it refers specifically states whether the taxes to be deducted from the defendant's wage income should be all his taxes or only those attributable to his wage income. The example does not refer to unearned income and the exhibit shows zero dollars for unearned income.
The court concludes, however, despite the absence of language precisely on point in the agreement, that the parties' intent in formulating the agreement can be effectuated only by limiting tax deductions to taxes attributable to his earnings. The separation agreement contemplates that the defendant would pay fixed percentages of his earned income less taxes (and certain other expenses) as alimony and child support. Hence, the parties had agreed that defendant's wage income was a fair basis for determining his alimony and child support. Allowing him to deduct taxes due on unearned income or on his second wife's income would have the effect of allowing him to reduce his child support and alimony obligations without any change in his earnings, a result that would defeat the parties' intent to base those obligations on his earnings. Deducting the percentage of state and federal income taxes attributable to his wages, based on the ratio of his earned income to total earned and unearned income of Dr. Hutchings and his second wife, as Ms. Hutchings has requested in her exhibit nine, is the fairest way to determine his net income because it applies the different rates of the income tax scales equally to all the income for each year. Although this methodology happens to coincide with that suggested by Cummings, plaintiff's father, the court was not influenced by Cummings' testimony on this point, as the court found his testimony of little value on Dr. Hutchings' tax liabilities. Instead, the court has independently determined that this methodology is the only one fair and practicable for implementing the parties' agreement.
An alternative method for calculating his taxes would use the federal and state income tax schedules for each year to determine the tax liability on Dr. Hutchings' earned income as if that had been his only income for the year. Such a method, however, would result in a greater amount of child support and alimony being owed each year than the methodology proposed by plaintiff and adopted by the court, as the following example shows.
In 1994, Dr. Hutchings' total earned and unearned income was $123,786.44. He owed state and federal income taxes that year of $31,466.54. His earned income of $123,755.72 comprised 99.9752% of his total income; and multiplying that percentage by his taxes yields a product of $31,458.73. Subtracting that amount from his earned income leaves a difference of $92,296.99 on which to base alimony and child support calculations.
Federal income tax in 1994 on just his earned income, after deducting all deductions and exemptions shown on defendant's 1994 federal income tax return, would have been $23,948. See Instructions for Form 1994 1040 and Schedules A, B, C, D, E, F, and SE, p. 51 or 84, http://www.irs.gov/pub/irs-94/i1040.pdf. As a resident of the state of New York, he would also owe state income tax on his earned income, after deducting all deductions and exemptions shown on defendant's 1994 federal income tax return, of $7,500.17. See 1994 New York State Tax Table. p. 8,http://www.tax.state.ny.us/pdf-1994/inc/1994_TAX_TABLBS.pdf. The sum of these two amounts is $31,448.17. Subtracting that amount from his earned income leaves a difference of $92,307.55.
Thus, the taxes derived from the tax tables on defendant's earned income are less than the percentage of his total tax liability based on a ratio of his earned income to his total income. Thus, Dr. Hutchings' net income, and his corresponding child support and alimony obligations, would be greater if taxes were computed using the tax tables just on his earned income than if under the ratio methodology proposed by Ms. Hutchings and adopted by the court. The same holds true in each of the years under consideration. Moreover, using the tax tables to calculate taxes due on earned income has the effect of treating all unearned income as being taxed at the marginal rate, and there is no logical basis for doing so.
Since Ms. Hutchings asks that the court adopt a method of calculating Dr. Hutchings' child support and alimony obligation that is more favorable to defendant than basing his obligation on tax table computation of taxes due on earned income, and since the methodology proposed by plaintiff also appears fairer and is more equitable, the court will use that method.
After determining defendant's alimony and child support obligations and payments for the period 1994 through the end of 2001, the court finds that defendant owes Ms. Hutchings unpaid alimony and child support of $32,259 for that period.
2. Unreimbursed Medical Expenses
The separation agreement required the parties to split equally "the cost of all reasonable and necessary unreimbursed medical, dental, orthodontic, eye care, prescription, psychiatric and psychological expenses of the minor children." Ms. Hutchings' motion for contempt claims that defendant has not complied with his obligation to pay his half-share of unreimbursed medical expenses. The evidence established that there were unreimbursed medical expenses for the minor covered by the judgment in the amount of $2,895.31. Dr. Hutchings has paid $127.70 toward his half-share of $1,559.29 of those expenses and thus has not complied with the court order.
Dr. Hutchings has not demonstrated that he was unable to comply with the court's order. He proved no lawful excuse for his noncompliance. His explanation that he did not receive copies of the bills from Ms. Hutchings was not credible, and the court finds Ms. Hutchings' testimony that she sent him copies of these bills believable and proven to be true. Defendant's testimony and financial affidavit show his ability to comply with the order to pay half the unreimbursed medical expenses. Ms. Hutchings' motion to hold Dr. Hutchings in contempt for his failure to comply with this order is thus granted.
D. Interest
Ms. Hutchings seeks an order of interest under General Statutes § 37-3a on the unpaid alimony and child support arrearages. Under § 37-3a, a court may award interest for the detention of money after it becomes payable.
A trial court must make two determinations when awarding compensatory interest under § 37-3a: (1) whether the party against whom interest is sought has wrongfully detained money due the other party; and (2) the date upon which the wrongful detention began in order to determine the time from which interest should be calculated.
(Internal quotation marks omitted.) Maloney v. PCRE, LLC, 68 Conn.App. 727, 755, 793 A.2d 1118 (2002). An allowance of interest is at the discretion of the trial court. Mihalyak v. Mihalyak, 30 Conn.App. 516, 620 A.2d 1327 (1993). An award of interest under § 37-3a because of a "wrongful" detention of funds, moreover, does not require any venal or sinister purpose in failing to pay sums due. Dr. Hutchings has had use of the moneys he did not pay, and Ms. Hutchings has not. Applying the statutory criterion under § 37-3a, the court finds that Dr. Hutchings' failure to pay the full amount of alimony and child support was "wrongful." The "date upon which the wrongful detention began" is the final day of each calendar year, on which date the defendant had failed to pay the plaintiff the full amount he owed her for that year. Accordingly, the court awards interest of $27,495.
The order of interest applies to the amounts contained in the two checks that defendant paid to Ms. Hutchings in October 2000. Although she returned those checks, they represented only partial payment of Dr. Hutchings' arrearage then owing to her. Thus, her refusal of this tender did not relieve defendant of the obligation to pay those funds or interest thereon. See Chrustebsen v. Cutaia, 211 Conn. 613, 621, 560 A.2d 456 (1989) ("If the debtor does not tender full payment, the [creditor] retains the right to reject any partial payment and to collect the interest that continues to accrue until the tender of the entire amount due"); see also General Statutes 42a-3-604(1) ("Any party making tender of full payment to a holder when or after it is due is discharged to the extent of all subsequent liability for interest, costs and attorneys fees"). In the present case, Dr. Hutchings presented an exhibit of his payments, including the two tendered checks, for which he was seeking credit for purposes of calculating any final arrearage. He thus claimed that his tender of those two checks satisfied his obligation of that amount of that portion of the debt, and was no longer offering to pay her the debt represented by those checks. As a consequence, he does not fit within the rule of State v. Lex Associates, 248 Conn. 612, 629, 730 A.2d 38 (1999), where the court held that "[r]efusal of a tender of payment, however, while it does not discharge a debt, discharges any further accrual of interest if the purchaser keeps the tender good pendente lite [contingent on the outcome of the litigation]."
The court does not find it appropriate to compound interest here. Dr. Hutchings' conduct, though wrongful, was not maliciously or intentionally so. Fox v. Schaeffer, 131 Conn. 439, 446, 41 A.2d 46 (1944). See also Castellano v. Mongillo, Superior Court, judicial district of New Haven at New Haven, Docket No. No. 29 68 46 (December 23, 1992, Hodgson, J.) ("The court has not calculated compound interest because no evidence was presented to support the conclusion that, had the notes been delivered to them, the beneficiaries would have invested the income from the notes"); Cerro Metal Products Company v. Waterbury Screw Machine Products Company, Superior Court, judicial district of Waterbury, Docket No. 096484 (May 14, 1991, Healey, S.T.R.) ( 4 Conn. L. Rptr. 82) ("What is in dispute is the calculation of interest pursuant to Connecticut General Statutes 37-3a. The plaintiff takes the position that it is entitled to compound the interest monthly while the defendant claims that only simple interest should be allowed. The parties requested the opportunity to file briefs as to their respective positions. Neither has found a precedent on point. The error in the plaintiff's position is that compounding requires the designation of a period, which could be daily, weekly, monthly, quarterly, semi-annually, or annually, and those are only the more frequent examples. The statute is silent as to an appropriate period and therefore if the plaintiff's position is to prevail, it is free to pick and choose whatever period the whim of the moment selects. This could not have been the intent of the legislature. Therefore I conclude that the statute contemplates simple interest.").
E. Counsel Fees
The court finds, moreover, that an order of counsel fees to the plaintiff is appropriate.
Once a contempt has been found, § 46b-87 establishes a trial court's power to sanction a noncomplying party through the award of attorneys fees . . . Pursuant to § 46b-87, that sanction may be imposed without balancing the parties' respective financial abilities . . . The award of attorneys fees in contempt proceedings is within the discretion of the trial court.
(Quotation marks omitted; citations omitted.) Eldridge v. Eldridge, supra, 244 Conn. 534. Ms. Hutchings' counsel submitted an affidavit of counsel fees, regarding which Dr. Hutchings has neither objected nor sought an evidentiary hearing. The court may therefore determine the reasonableness of her fee request on the record. Smith v. Snyder, 267 Conn. 456, 480-81, 839 A.2d 589 (2004); Arcano v. Board of Education of City of Stamford, 81 Conn.App. 761, 841 A.2d 742 (2004).
[T]he determination of reasonableness of attorneys fees appropriately takes into consideration a range of factors, among which the time and labor expended is but one consideration. See O'Brien v. Seyer, 183 Conn. 199, 206, 439 A.2d 292 (1981), (factors properly considered in determining reasonable compensation to attorney summarized in Code of Professional Responsibility, now rule 1.5 of Rules of Professional Conduct); Steiger v. J.S. Builders, Inc., 39 Conn.App. 32, 38-39, 663 A.2d 432 (1995) (adopting list of factors to be considered by trial court if it determines plaintiff is entitled to attorneys fees and costs in unfair trade practices litigation).
Esposito v. Esposito, 71 Conn.App. 744, 749, 804 A.2d 846 (2002). Attorney Judith Dixon, plaintiff's counsel, is an experienced and well-regarded matrimonial attorney. Her billing rate is not excessive for an attorney of her expertise and experience in this area. The court has carefully reviewed her affidavit of fees and finds that the rates she charged here and the services she rendered are fair and reasonable. The court awards counsel fees of $7,695.45 to Ms. Hutchings for all proceedings prior to the supplemental hearing, and orders Ms. Hutchings to submit a supplemental affidavit of counsel fees for services rendered during and since that hearing.
The court also finds, in the absence of an objection or request for evidentiary hearing by the defendant, that the affidavit of counsel fees submitted on May 20, 2005, by counsel for the minor children is fair and reasonable. Attorney Michael Sconyers is an experienced and well-qualified practitioner who is highly regarded for his representation of minor children. His hourly rate is within the norms for this area of the state and commensurate with his experience and expertise. After careful review of the affidavit he submitted, the court finds a fee of $9,108.42 to be fair and reasonable for services he rendered through April 30, 2005. Moreover, in view of the fact that defendant has been found in contempt and the relative financial circumstances of the parties, the court orders defendant to pay the unpaid balance of $7,903.42 remaining on that fee in full within thirty days.
Under General Statutes § 46b-62, the court may award counsel fees to enforce or modify the judgment of dissolution by considering the parties' "respective financial abilities" and the factors set forth in § 46b-82.
III — ORDERS
Dr. Hutchings shall pay the following amounts, all having been found owing or payable by defendant, within thirty days of the date of this decision.
a. Alimony and child support: Dr. Hutchings shall pay to Ms. Hutchings the unpaid alimony and support found owing to her for the period 1994 through the end of 2001 in the amount of $32,259 within thirty days of the date of this decision.
b. Unreimbursed medical expenses: Within thirty days of the date of this decision, Dr. Hutchings shall pay his $1,819.96 share of unreimbursed medical expenses. Since Ms. Hutchings has paid some of the medical providers or expenses in part or full, and made no payment toward others, Dr. Hutchings shall make this payment directly to her. She is ordered to use this payment to satisfy medical bills or expenses included in her exhibit ten.
c. Interest: Dr. Hutchings shall pay interest of $27,495 to Ms. Hutchings within thirty days.
d. Counsel fees: Dr. Hutchings shall pay the counsel fees awarded here to plaintiff's counsel and counsel for the minor child within thirty days of the date of this decision.
BY THE COURT
STEPHEN F. FRAZZINI JUDGE OF THE SUPERIOR COURT