Opinion
NNHFA064022284S
02-03-2016
Linda Steller v. Rodney Steller
UNPUBLISHED OPINION
ORDER
Kenneth L. Shluger, J.
ORDER REGARDING:
07/28/2015 157.00 POST-JUDGMENT MOTION FOR MODIFICATION--ALIMONY
The foregoing, having been heard by the Court, is hereby:
ORDER: GRANTED
MEMORANDUM OF DECISION
REGARDING DEFENDANT'S MOTION FOR MODIFICATION (#156)
The simple question presented is whether the payer of alimony is entitled to reduce his work hours upon reaching 65 years old and reduce his alimony payments as was his contemplation at the time of the divorce.
FACTUAL BACKGROUND
The parties were married on August 26, 1973 and divorced 35 years later, pursuant to a complex marital settlement agreement on October 21, 2008. They have two daughters, who are grown and married with children of their own.
During the course of the marriage, the husband was a successful dentist and earned approximately $378,000 during the year of their divorce. The wife worked in the husband's dental practice as an office manager/receptionist/bookkeeper for many years, but earned only $115 per week at the time of their divorce.
Clearly, the marriage was a partnership wherein the husband earned most of the money and the wife worked outside of the home as well as having primary responsibilities for homemaking and child rearing. The 43-page separation agreement, provided for a fair and equitable distribution of the marital assets which were then valued at $2.5 million.
The husband filed this motion to modify his alimony obligation downward so that he may cut back from his current 40 hours per week of work. In his own words, after 40 years of drilling and pulling teeth, he is tired. He seeks a reduction in his alimony obligation, his life insurance obligation of $550,000 to secure the alimony award and a reduction in his disability insurance obligation.
At the time of the divorce, both parties worked full-time and were 57 years old. In the separation agreement, the wife was awarded alimony of $100,000 per year. The husband will turn 66 on March 3, 2016. The wife will turn 66 later this year.
Paragraph 4.3 of the separation agreement states, " it is acknowledged that the husband has the right to retire upon reaching the age of 65 years and he may petition the court to take a " second look" for a hearing to determine the amount of alimony which he shall pay to the wife. The retirement of the husband at age 65 shall be considered a substantial change in circumstances, but in any event, even if the husband does not retire at age 65, he shall have a right to seek a modification of alimony at age 65 without the need of showing a substantial change in circumstances."
The parties appeared before the undersigned on January 29, 2016, and both were represented by counsel. The court finds proven by a fair preponderance of the evidence the following facts:
1. At the time of the dissolution, the husband earned $378,000 per year and the wife earned approximately $6,000 per year.
2. At the time of the dissolution the total marital estate had assets of $2.5 million.
3. The wife was awarded substantial assets through the separation agreement and a permanent alimony award of $100,000 per year.
4. Since the date of the dissolution, the wife has neither sought employment nor engaged in employment outside of the home. She spends much time with her married daughters and babysits for her grandchildren 40 hours per week for no fee.
5. Since the date of the dissolution, the husband has worked the same 40 hours per week which he has always worked. In 2013 he earned approximately $528,000. In 2014 he earned approximately $469,000. In 2015 he earned approximately $260,000.
6. At the age of 65, the husband, now remarried, wishes to cut back his work to approximately 33 hours per week, take 10 or more weeks of vacation per year, and to essentially enjoy his golden years. In addition to his working at his dental practice, he donates time to provide dental services for indigent patients and volunteers with the Connecticut State Police and at Yale Dental School. In the husband's estimation, if he were to cut back his hours, he would earn approximately $200,000 per year. The court finds that his earning capacity, given his age and circumstances is $200,000.
7. The wife presently has no earned income, but has mutual funds, IRA accounts and annuities worth $1 million. She claims to earn only $59 per week or approximately $3000 per year on dividends from her investments, which is approximately 1/3 of 1%. In addition, the wife owns a home which she values at $450,000 with a $273,000 mortgage or $176,000 in equity. She has a 2015 motor vehicle which her ex-husband bought for her last year although he was under no obligation to do so. Finally, the wife is entitled to a 20% share of the proceeds from sale the of the husband's dental practice which is worth $600,000. In fact, he had a sales contract (exhibit A) to sell the practice this month for $600,000 and he cancelled the sale at the last minute. Thus, upon the sale, the wife will realize an additional $120,000 and it is expected that a sale will occur this year.
8. The wife's financial affidavit, states that she spends $2,039 per week or approximately $106,000 per year. Notwithstanding that claim however, there are many expenses which appear to be inflated and thus should be disregarded or minimized, including household improvements $222 per week, gasoline $70 per week(she does not work and gas is at an all time low price), automobile repairs and maintenance (brand-new car) $23 per week for public transportation $24 per week(no evidence that she takes bus or trains), charity $61 per week, gifts $155 per week, interest, fees and credit card expense $11 per week (with $1 million of liquid assets there should be no credit card interest fees), and items for grandchildren $38 per week. The court finds that the wife could reduce her weekly expenses by $536 per week and expend only $1,503 per week, or $78,156 per year.
9. The court finds that the wife could continue to enjoy her present lifestyle without the necessity of working with $78,156 per year.
10. It was specifically contemplated and agreed to by the parties that upon the husband turning 65, it was likely that he would retire or scale back from his employment and that he would be entitled to a " second look" for the purpose of his alimony obligation.
11. Notwithstanding this agreement, the wife has taken no steps whatsoever to enter the workforce (she was working full-time as an office manager at the time of divorce) or to even ascertain what her Social Security rights will be.
12. The wife is woefully ignorant as to her financial circumstances, opportunities and investments. She testified that she has placed all of her funds with a financial advisor who moves the funds from place to place, at his discretion but without her direction and not understanding the strategies employed. She did not seem to appreciate the court's inquiry as to why she was earning only $3000 per year on a portfolio of $1 million. Clearly, the wife would be well advised to have meetings with a few different financial planners and ask hard questions.
13. The wife is woefully ignorant as to her Social Security rights, notwithstanding the fact that she will turn 66 this year and was married for more than 10 years.
14. In considering a new alimony order, the court has carefully considered the statutory criteria pursuant to CGS section 46b-82 including the length of the marriage, the causes for the dissolution of the marriage, the age, health, station, occupation, amount and sources of income, earning capacity, vocational skills, education, employability, estate and needs of each of the parties.
15. The wife worked for many years in her husband's dental practice. She presently works as a nanny for her two grandchildren at 40 hours per week. The wife has an earning capacity of $400 per week or $20,800 per year.
16. The life insurance and disability insurance obligation agreed to by the parties at the time of the dissolution can and should be reduced at this time as the term to be protected is shorter and the amount is lower than at the time of the divorce.
17. The husband asks that this modification be made retroactive to the date of the filing of the motion.
This will not be ordered as the husband enjoyed his higher income during that period and the wife has presumably already spent that money.
LEGAL DISCUSSION
The separation agreement clearly and unequivocally established that the husband may petition the court for a " second look" of his alimony obligation on his 65th birthday. A separation agreement is a contract. The court in McKeon v. Lennon, 147 Conn.App. 366, 83 A.3d 639 (2013), held that " in domestic relations cases, " [a] judgment rendered in accordance with a stipulation of the parties is to be regarded and construed as a contract . . . Accordingly, [o]ur resolution of the [plaintiff's] claim is guided by the general principles governing the construction of contracts. A contract must be construed to effectuate the intent of the parties, which is determined from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction." (Internal quotation marks omitted.) Guaragno v. Guaragno, 141 Conn.App. 337, 344, 61 A.3d 1119 (2013).
Upon a substantial change in circumstances or in this case, the husband's 65th birthday, the court is compelled to consider all of the statutory criteria pursuant to CGS section 46b-82 including the length of the marriage, the causes for the dissolution of the marriage, the age, health, station, occupation, amount and sources of income, earning capacity, vocational skills, education, employability, estate and needs of each of the parties and the award, if any, which the court may make pursuant to section 46b-81. Once the justification of a modification has been established, either by a substantial change in circumstances or in this case, by the language of the agreement, " . . . the court then answers the question of modification, taking into account the general alimony factors found in [General Statutes] § 46b-82." Gervais v. Gervais, 91 Conn.App. 840, 854, 882 A.2d 731, cert. denied, 276 Conn. 919, 888 A.2d 88 (2005).
The court finds that the plaintiff can work and earn $20,000 per year. While there was no evidence presented as to what the plaintiff is likely to receive upon her applying for full Social Security benefits at age 66 later this year, it is likely that she will receive some benefit. The wife needs only $78,000 to maintain her standard of living based on the court's view of her financial affidavit.
ORDERS
1. Effective on the plaintiff's 66th birthday, the defendant's alimony obligation shall be reduced to $60,000.
2. Effective on the plaintiff's 66th birthday, the defendant's life insurance and disability insurance obligation shall be reduced to 50% of their present amounts.
3. All other orders, not inconsistent with this order shall remain in full force and effect.