Opinion
No. FA 78 0223144
May 13, 2011
MEMORANDUM OF DECISION
I BACKGROUND AND FACTS
The parties have filed post-judgment motions for contempt and modification of alimony, based upon the original judgment of the court, Reicher, J., issued on March 30, 1979. The plaintiff appeared in person from his home state of Texas and was represented by counsel. Due to her poor health, the defendant appeared telephonically from her home in Philadelphia. She was also represented by counsel, pro hac vice. The hearing was held before the court on May 6, 2011.
The record reveals the following facts: The parties were married for approximately eighteen (18) years. Upon the dissolution of their marriage 32 years ago, the plaintiff was ordered to pay lifetime alimony to the defendant in the amount of $100 per week until her death or remarriage. This order of alimony has not been modified by this or any other court since the time of dissolution. The plaintiff concedes he has not been in compliance with this order since July 2001 and that, absent a modification, his accumulated arrearage at the time of this hearing was $51,100.
Both parties are 69 years old. The plaintiff is generally in good health, although he may need surgery to relieve pain in his knee. The defendant suffers from many physical maladies, including asthma, severe spinal arthritis, spinal stenosis, obesity, heart problems and ambulatory dysfunction, all for which and more she takes eleven (11) prescription medications per day. Also according to her testimony, she was diagnosed with a neurological disease in the mid-1970s, which she asserts was one of several causes of the dissolution action brought by the plaintiff. However, the court notes there was no finding in the record of this cause for the dissolution. Instead, the judgment generally states at paragraph number 3: "The marriage between the parties has broken down irretrievably."
A. Plaintiff's Income and Assets
At the time of the dissolution, the plaintiff's financial affidavit showed gross weekly wages of $509.62, which netted him a weekly income of $383.23. On his most recent financial affidavit, filed with the court on October 18, 2010, his gross weekly income from wages is $462, netting him $371 per week. In addition, he receives social security income of $380 which, along with his net earned income, totals to weekly income of $751. The plaintiff owns his own home valued at $130,000, the title for which is mortgaged, leaving equity in the amount of $72,000.
The only other asset of significance shown on the plaintiff's financial affidavit is a 2001 Ford Ranger valued at $1,500. A leased 2010 Toyota Camry is also listed, which he claims is leased and primarily driven by his current wife, who recently has been laid-off from her job. She now contributes her weekly unemployment check of $183 toward household expenses totaling $852. In addition to these assets, the plaintiff's current financial affidavit shows credit card liabilities totaling $9,120.
Historically, the plaintiff has been a modestly successful small businessman. His business fell on hard times at the turn of the century, which he claims was due to global competition in the faux-flower industry, resulting in the following, cascading events. When his business began failing in 2001, he filed for Chapter 11 protection. After this reorganization of his business failed, he filed for Chapter 7 liquidation in 2002, followed by his own personal bankruptcy in 2004. During this period of time, the plaintiff spent all of his retirement funds on maintaining his failing business and began receiving social security, reduced by his age of 62 at that time. He now supplements his social security income as a meat cutter in a grocery store.
In 2004, the year of his bankruptcy, the plaintiff claimed an adjusted gross income (AGI) of $20,314, according to his federal income tax return. In the following years, the plaintiff's income steadily increased, as reflected in his reported AGI on individual income tax returns, as follows: In 2005 — $37,094; 2006 — $46,200; 2007 — $44,917; 2008 — $56,114; and in 2009 — $60,566. Since 2009, the plaintiff claims he has received less income due to reduced overtime opportunities from his employer and, in addition, he claims that knee pain prevents him from working long hours on his feet at the grocery store.
Although the plaintiff did not produce a 2010 income tax return, he has filed a financial affidavit, which shows annualized gross income of $43,784. The plaintiff conceded in his testimony that his financial affidavit reflects only his base pay from employment, without the inclusion of overtime. Therefore, the court considers the plaintiff's actual income to be higher than the income reflected on his financial affidavit, albeit more limited now due to the credible testimony he offered concerning more limited overtime and his painful and failing knee at the age of 69.
"[T]he court may base financial awards on earning capacity rather than actual earned income of the parties . . . While there is no fixed standard for the determination of an individual's earning capacity . . . it is well settled that earning capacity is not an amount which a person can theoretically earn, nor is it confined to actual income, but rather it is an amount which a person can realistically be expected to earn considering such things as his vocational skills, employability, age and health . . . [T]he court may consider earning capacity from employment when the evidence shows that the reported amount of earnings is unreasonable. Thus, for example, when a person is, by education and experience, capable of realizing substantially greater earnings simply by applying himself or herself, the court has demonstrated a willingness to frame its orders on capacity rather than actual earnings. It is appropriate to consider a party's earning capacity where there is evidence of that party's previous earnings." (Citations omitted; internal quotation marks omitted.) Boyne v. Boyne, 112 Conn.App. 279, 283, 962 A.2d 818, 821-22 (2009).
Having considered all of the credible evidence available, and as instructed by the Boyne case, the court considers the plaintiff to have an annual earning capacity of $52,000, inclusive of his annual social security payments of $19,760. This income figure is somewhat lower than what is reflected on his most recent tax returns, but takes into account his ever increasing age and current health.
B. Defendant's Income and Assets
The defendant's financial affidavit at the time of the dissolution showed net weekly wages of $90. In addition, it showed real estate located at 845 Kendrick Street, Philadelphia, valued at $40,000 with an $11,000 mortgage and (combined) equity of $29,000. This real property was transferred to the defendant in the dissolution judgment and is now reflected on the defendant's current financial affidavit as free and clear of any mortgages or other encumbrances, with equity in the amount of $62,000. In her testimony, she asserts that the home is in poor condition, with serious problems including a leaking roof and walls. The only other assets of significance shown on her current financial affidavit are a 2007 PT Cruiser, valued at $5,775, with equity of $1,875, and a checking account of $1,000, which she now testifies has been substantially depleted. Also on her current financial affidavit, the defendant shows total net weekly income of $189, derived from social security payments as her only source of income. In addition to these assets and income, the defendant's current financial affidavit shows credit card liabilities totaling $16,609.
During his cross-examination, the plaintiff assailed the defendant's credibility on the question of her income. However, no evidence was offered or elicited at the hearing to support the conclusion that the defendant earns any more income than is reflected on her financial affidavit, except for government benefits she receives for such things as food, heat and support for her electric bills. Although this government assistance may increase her resources to a weekly figure somewhat more substantial than $189, she has not been shown to have any other liquid assets, other than those shown on her financial affidavit. However, based upon her testimony of receiving food stamps in particular, the court discounts her specific claim of a weekly food expense in the amount of $100 from her general claim of $354 in weekly expenses, as reflected on her financial affidavit.
The fact that the defendant has been able to obtain credit from lending institutions for an automobile and four credit cards is troubling. However, this may be more a reflection of the incredible market for consumer credit for a homeowner without substantial income than a lack of veracity on the part of the plaintiff. Therefore, the court accepts the defendant's financial affidavit and testimony as accurate, but for the government benefits she now admits she receives.
II FURTHER DISCUSSION A. Motions for Modification
Both parties have filed motions for the modification of alimony. Both motions are denied. Although the incomes of both parties have increased since the time of the dissolution, their relative incomes have not changed substantially.
"Trial courts have broad discretion in deciding motions for modification . . . Modification of alimony, after the date of a dissolution judgment, is governed by General Statutes § 46b-86 . . . When the disputed issue is alimony, the applicable provision of the statute is § 46b-86(a), which provides that a final order for alimony may be modified by the trial court upon a showing of a substantial change in the circumstances of either party . . . The party seeking modification bears the burden of showing the existence of a substantial change in the circumstances . . . The change may be in the circumstances of either party. The date of the most recent prior proceeding in which an alimony order was entered is the appropriate date to use in determining whether a significant change in circumstances warrants a modification of an alimony award . . .
"In general the same sorts of [criteria] are relevant in deciding whether the decree may be modified as are relevant in making the initial award of alimony . . . More specifically, these criteria, outlined in General Statutes § 46b-82, require the court to consider the needs and financial resources of each of the parties . . . as well as such factors as the causes for the dissolution of the marriage and the age, health, station, occupation, employability and amount and sources of income of the parties." (Emphasis in original; citations omitted; internal quotation marks omitted.) Crowley v. Crowley, 46 Conn.App. 87, 91-92, 699 A.2d 1029 (1997); See General Statutes § 46b-82.
General Statutes § 46b-82(a) provides: "At the time of entering the decree, the Superior Court may order either of the parties to pay alimony to the other, in addition to or in lieu of an award pursuant to section 46b-81. The order may direct that security be given therefor on such terms as the court may deem desirable, including an order pursuant to subsection (b) of this section or an order to either party to contract with a third party for periodic payments or payments contingent on a life to the other party. The court may order that a party obtain life insurance as such security unless such party proves, by a preponderance of the evidence, that such insurance is not available to such party, such party is unable to pay the cost of such insurance or such party is uninsurable. In determining whether alimony shall be awarded, and the duration and amount of the award, the court shall hear the witnesses, if any, of each party, except as provided in subsection (a) of section 46b-51, 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 and needs of each of the parties and the award, if any, which the court may make pursuant to section 46b-81, and, in the case of a parent to whom the custody of minor children has been awarded, the desirability of such parent's securing employment."
The essential purpose of alimony stems from a duty to support a former spouse, with the amount and duration determined by the court after taking into consideration the applicable law and facts of the case. In the present case, the defendant receives lifetime alimony, which appears to rest upon the fact that the defendant was neurologically compromised at the time of the dissolution. Although the defendant claims that fault in this case includes her allegation of infidelity, this reason was not made a part of the record and remains unproven to the court.
Based upon the financial affidavits of the parties filed in 1979 and the income determinations made by the court in this case, supra, both parties' gross incomes have increased by approximately 100%. Therefore, their relative incomes remain approximately the same. Absent orders of support, the defendant's net income was approximately 18% of the plaintiff's gross income both then and now. Further, her net income was approximately 25% of his net income both then and now, as claimed on his financial affidavits. Although the 1979 order of alimony, together with child support at the time of dissolution, provided the defendant with a higher percentage of the family income, child support has long since been terminated and is not claimed as a substantial change of circumstances in this case.
On the defendant's 1979 financial affidavit, she used a net income number alone.
The court recognizes that there is a higher income capacity found in this case than is reflected in the plaintiff's financial affidavit; however, the court's orders concerning the arrearage repayment will consume a substantial amount of his additional, imputed income.
Although no evidence has been presented concerning the effects of inflation on a 100% increase in income or an alimony payment of $100, the court recognizes that they have far less value today than at the time of the dissolution 32 years ago. For these reasons, the court's analysis thus far has focused on comparative ratios of income.
What this analysis fails to elucidate, however, is the effect these changes have had on the disposable incomes of the parties, which may influence the duty and degree of continuing support. Based upon the financial affidavits filed with the court, both parties incur expenses that exceed their incomes. However, it appears by inference from the evidence that the plaintiff has more disposable income than the defendant, based upon the relative assets and liabilities the parties have accumulated since the time of dissolution.
The plaintiff has been able to accumulate more equity in his home in the ten or eleven years since he purchased it than the defendant has accumulated in the thirty-two years since the date of judgment in this case. In addition, the plaintiff's consumer debt, exclusive of his mortgage, is nearly one-half of the defendant's indebtedness on various credit cards. In the court's view, however, the plaintiff's relatively positive position is accounted for by his failure to comply with his $5,200 annual alimony obligation for a period of nearly ten years. Therefore, based upon the accumulation of assets and liabilities of the parties, the court finds that any substantial change in circumstances based upon this analysis relates more logically to the contempt and not to the change in the parties' incomes, absent support.
Given the general duty of the plaintiff to support his former spouse, the court will also consider the defendant's ability to meet her expenses. She claims $354 in general weekly expenses, as reflected on her financial affidavit. She includes in this weekly amount, food expenses of $100 and utility expenses for electricity of $24.75 and for gas of $18.75. However, she has failed to disclose the specific value of food stamps and other government benefits she receives for her utilities. When questioned at the hearing, she was unable to identify the specific amounts for food stamps or other benefits she receives. This government assistance, undisclosed on her financial affidavit, may increase her resources to a higher weekly figure than $189 and commensurately reduce her expenses. Absent her specific testimony or other evidence to the contrary, the court concludes that the defendant's food expense of $100 per week, for example, is not adjusted for the food stamps she receives. On the other hand, her utility expenses appear more modest and may reflect reductions for subsidies received. Nonetheless, it is difficult for the court to accurately determine her actual weekly expenses absent more specific testimony concerning the net effects of her governmental assistance.
Yet another basis for analyzing the relative change in the financial circumstances of the parties is by comparing the percentage of family income they shared after the transfer of support from one party to the other. In 1979, the plaintiff earned gross income of $509 per week, from which he netted $383. With weekly orders of $100 in alimony and $75 in child support at the time of judgment, the plaintiff was left with $208 per week, absent the tax consequence for the payment of alimony. By comparison at that time, the plaintiff netted $90 per week and together with the award of support in the amount of $175, the defendant received $265 per week or 56% of the family income, absent the tax consequence for the receipt of alimony. Reducing this by the $75 weekly child support order, which is no longer paid or applicable, the comparative number is reduced to $190 or 40% of the family income, absent tax consequences.
Today, the plaintiff claims net income of $751 on his financial affidavit. After the transfer of a $100 alimony payment to the defendant, her income as a percentage of family income compares far less favorably now than in 1979. Instead of receiving 40% of the family income, she now receives only 30% of the family income, absent tax consequences. However, this analysis does not take into consideration the higher imputed income assigned to the plaintiff by the court in this case. Although this militates in favor of finding a substantial change in circumstances, the numbers would change, yet again, if governmental subsidies received by the defendant were to be considered.
This is problematic in that the defendant provided no specific information for the calculation of the benefits and subsidies she receives. If, for example, she receives $100 in food stamps and other benefits per week, her percentage of family income goes up from 30% to a figure far closer to the 40% of family income she received in 1979, absent child support. These numbers, however, are speculative in light of the defendant's failure to adequately and accurately disclose the benefits she receives. On the other hand, these numbers do not include the income imputed to the plaintiff by the court in this case which would, theoretically, reduce her percentage of family income. Furthermore, no tax analysis has been presented or considered to support an accurate analysis of the actual, after tax consequences of any of these changes, which is particularly important in this case where both parties receive social security benefits and only one party is gainfully employed.
Although the percentage would most likely change in favor of the defendant, the court's imputed income number is a gross number and not a net number, as used in other examples.
Based upon these facts and this analysis, the parties, and most certainly the plaintiff, have not met their burden of proving a substantial change in circumstances, as required to modify the plaintiff's order of alimony. Although this percentage of family income analysis may be the most compelling approach in support of a substantial change in circumstances, the defendant did not make this specific argument to the court. Furthermore, in the absence of an accurate disclosure of the exact nature and amounts of the plaintiff's governmental benefits, a fair and accurate comparative analysis is impossible and would otherwise be speculative.
B. Contempt
The defendant has filed a motion for contempt for the plaintiff's admitted non-compliance with the order of alimony in this case of $100 per week. Based upon the evidence presented, the plaintiff is found in contempt. This finding is not based upon his actions in 2001 through 2004, during which his business was restructured and then liquidated, followed by his personal bankruptcy in 2004. It is instead based upon his failure to pay his court ordered support in subsequent years, while earning gross income of between $45,000 and 60,000. Although he was released from his other liabilities as the result of his personal bankruptcy, he was not relieved of his duty to support his former spouse. And although he had the right to seek relief from the order in this court at the time of his bankruptcy, he failed to do so and must be held accountable.
1. Laches. The court will begin with the plaintiff's defense of laches, claimed at trial but not specifically pleaded as a special defense. Laches is an equitable defense applicable in dissolution cases. "Laches is an equitable defense that consists of two elements. First, there must have been a delay that was inexcusable, and, second, that delay must have prejudiced the defendant. The mere lapse of time does not constitute laches unless it results in prejudice to the defendant as where, for example, the defendant is led to change his position with respect to the matter in question . . . Thus, prejudicial delay is the principal element in establishing the defense of laches. (Citation omitted; internal quotation marks omitted.) Cifaldi v. Cifaldi, 118 Conn.App. 325, 334-35, 983 A.2d 293 (2009).
The defendant has responded to the claim of laches by submitting into evidence several letters from law firms, in response to her requests for representation, beginning in 2001 and continuing until 2009. Each law firm required retainers she was unable to afford. See Exhibits A, B and C. She further testified that she contacted legal aid organizations in Connecticut, Pennsylvania and Texas, all to no avail, as she credibly testified that she was denied representation and was referred to private law firms. The defendant also credibly testified that she sent two certified letters to the plaintiff in Texas, return receipt requested, giving him notice of her intent to pursue her claim for past due alimony. These certified letters were claimed to have been sent sometime after the plaintiff's default, but they were not submitted as evidence. The defendant and her attorney claim, nonetheless, that evidence of these letters exists and the court has no reason to doubt their representations.
The plaintiff vehemently claims he did not receive these certified letters and that he received no communications from the defendant, whatsoever, of her interest in pursuing this matter until he was served with this motion for contempt in 2010. The court notes that the plaintiff testified that these certified letters were sent approximately nine to ten years ago. The plaintiff also credibly testified that, during this period of time, his business was failing, ending in liquidation and personal bankruptcy. In this context, the plaintiff's memory of his receipt of two certified letters claiming a debt may have been lost or diminished in the haze of other creditor claims and complaints.
The court finds that the defendant indeed sent two certified letters to the plaintiff many years ago, notifying him of his default. The court further finds as a matter of fact that the defendant followed these letters by pursuing legal representation over the course of many years to no avail and, therefore, without further actual notice to the plaintiff. Her actions in pursuing this motion and notifying the plaintiff were, for many years, ineffective but not inexcusable. However, as stated in Cafaldi, "prejudicial delay is the principal element in establishing the defense of laches." Id. In this case, the court finds that the plaintiff has not been unduly prejudiced by the delay of this action. Until now, he has taken advantage of the delay by accumulating greater assets and fewer liabilities than the defendant. He has not, however, taken any particular action in reliance upon this delay to his detriment. Furthermore, the court is able to fashion measured orders to account for the lengthy delay in bringing this case to court.
2. Contempt. The Supreme Court has recently reiterated the standard applicable to civil judgments of contempt in the case of In re Leah S., 284 Conn. 685, 935 A.2d 1021 (2007). The court explained: "[O]ur analysis of a judgment of contempt consists of two levels of inquiry. First, we must resolve the threshold question of whether the underlying order constituted a court order that was sufficiently clear and unambiguous so as to support a judgment of contempt . . . Second, if . . . the underlying court order was sufficiently clear and unambiguous, [the trial court must then determine] . . . whether the violation was wilful or excused by a good faith dispute or misunderstanding." (Citations omitted.) Id., at 693-94.
"The contempt remedy is particularly harsh . . . and may be founded solely upon some clear and express direction of the court . . . 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." (Citation omitted; internal quotation marks omitted.) Eldridge v. Eldridge, 244 Conn. 523, 529, 710 A.2d 757 (1998).
There is no question over the clarity of the court's order or the plaintiff's noncompliance with the weekly alimony order of $100 since July 1, 2001. The question in this case is his wilful noncompliance with that order. In his defense of the allegation of contempt, the defendant claims he was unable to pay the alimony award of $100 per week since he and his business fell on hard times ten years ago. Although this claim holds some credibility with the court, it is only arguably credible during the period of time between 2001 and 2004. Even then, the plaintiff testified that he emptied his retirement account in an unsuccessful attempt to support his business instead of paying alimony. Moreover, the plaintiff recovered financially from his personal bankruptcy in 2004 and began to earn income in an amount clearly sufficient to continue making his alimony payments to the defendant. Therefore, his claim of an inability to pay alimony is rejected as contrary to the facts. The court therefore finds the plaintiff willfully elected to discontinue paying alimony because it was an obligation he believed he could no longer afford.
Parties may not resort to self-help absent clear language or otherwise by agreement of the parties. In Sablosky v. Sablosky, 258 Conn. 713, 784 A.2d 890 (2001), the Supreme Court reiterated the rule that a party may not resort to "self-help . . . by disobeying the court's order without first seeking a modification . . ." (Internal quotation marks omitted) id. at 720, quoting Eldridge v. Eldridge, 244 Conn. 523, 532, 710 A.2d 757 (1998). The Supreme Court's "decisions in Sablosky and Eldridge serve to enforce an important public policy against resorting to self-help tactics." In re Leah S., 284 Conn. 685, 699, 935 A.2d 1021 (2007). Stated more simply, court orders must be obeyed until modified or successfully challenged in a court of law. See Mulholland v. Mulholland, 229 Conn. 643, 649, 643 A.2d 246 (1994).
III
CT Page 11366
ORDERS
In addition to the existing order of alimony in the amount of $100 per week, the plaintiff is ordered to pay an additional $100 per week on the arrearage amount of $51,200, calculated as of this date of judgment. This order shall be executed by a wage withholding order in the total amount of $200 per week. Until such time as these funds are removed from his paycheck, the plaintiff shall make payments directly to the defendant. The arrearage owed shall additionally be secured by a life insurance policy, to the extent it is reasonably available and affordable, in an amount sufficient to secure any remaining amount of the arrearage owed to the defendant.In the event that the plaintiff is in default of his payments for a period greater than ninety (90) days, the remaining arrearage shall be accelerated and become due and payable immediately. Simple interest of 10% on the remaining arrearage shall commence immediately upon such default pursuant to General Statutes § 37-3a.
The court has considered applying interest on the total arrearage. At the rate of $100 per week with interest at 10%, however, it appears that the underlying arrearage will never be satisfied and would only pay for the additional interest owed on the arrearage of $51,200.
Under the facts and circumstances of this case, the payment of $200 per week will increase the defendant's claimed income of $189 to $389 and therefore exceed the defendant's current expenses of $354, absent any additional governmental support she may be receiving such as food stamps. Requiring a payment by the defendant of more than $200 per week, secured by a wage withholding order, would provide little incentive for the plaintiff to continue working, as it accounts for 42% of his base pay of $471 in earned income per week.
SO ORDERED.