Opinion
No. FA 08-4009436-S
December 29, 2009
MEMORANDUM OF DECISION
This dissolution of marriage action between the plaintiff, Elizabeth Yavarone-Moroni, and the defendant, Lawrence Moroni, came before the court by a writ, summons and complaint, returnable to the court on October 7, 2008, and tried to the court on November 4 and 5, 2009. The plaintiff and the defendant filed their proposed findings of fact and proposed orders on November 6, 2009 and November 17, 2009 respectively. The plaintiff filed objections to defendant's proposed findings of facts on November 25, 2009. Both parties were represented by counsel.
At the commencement of the trial, the plaintiff claimed her motion for Order and/or Further Relief #106, alleging a "violation of the automatic orders or litigation misconduct." The plaintiff seeks a finding of contempt and counsel fees.
Both parties submitted claims for relief. The plaintiff wife, Elizabeth Yavarone-Moroni, by way of financial relief seeks health insurance from the defendant for a period of 10 years, lump-sum alimony in the amount of $250,000, periodic alimony in the amount of $1,000 per week, ownership of the defendant's $500,000 policy of life insurance, indemnification for the liabilities associated with the family business and the marital home, counsel fees, and an order that the husband provide heating oil at no cost to the wife and her mother for their lifetimes. The defendant husband, Lawrence Moroni, by way of financial relief agrees to provide the wife with health insurance for a period of five years, and assume responsibility for all debts and expenses associated with the marital home and family business in consideration for sole ownership of the assets. He proposes a property settlement of $92,500 payable over three years, and agrees to provide home heating oil to his wife at his cost for a period of five years.
In rendering this decision and making the ensuing orders, the court has carefully considered the statutory criteria in General Statutes §§ 46b-81 and 46b-82, regarding the assignment of the marital estate and alimony, respectively, General Statutes § 46b-62 regarding attorneys fees, the case law as it has developed regarding these matters, and other relevant federal and state laws regarding the issues that confront the court. This court has considered the parties' arguments, proposed findings of fact and proposed orders. The court had the opportunity to observe the demeanor of the parties and the witnesses at the time of trial. In addition to the parties, the court received testimony from James Root, Teresa Schroeder and Matthew Moroni. There were numerous full exhibits, each of which was examined by the court.
I FINDNGS OF FACT A. Jurisdictional Findings
The plaintiff and the defendant were married when they were 42 and 45 years old respectively, on July 12, 1997, in Old Saybrook, Connecticut. The plaintiff has resided continuously in the state of Connecticut for at least twelve months preceding the date of the filing of the complaint. The court has jurisdiction over the marriage and the parties. There are no children issue of the marriage. The parties have never received public assistance.
For the reasons discussed hereinafter, the court finds that the 12-year marriage between the parties has broken down irretrievably and there is no hope of its reconciliation.
B. The Parties
The plaintiff, now 54 years old, is a high school graduate who returned to school to become a licensed corporate flight attendant. Because of the weak economy, she has only been able to find work as a bartender in Westbrook, CT. She reports income from all sources of $380 per week excluding child support. The court finds that her net income is $332 per week. When the plaintiff met the defendant in 1996, she was raising three young daughters, ages two, five and eight, from her first marriage. When she married the defendant, one year later, she had a stable economic foundation and good health. She enjoyed good credit, was employed, and had approximately $200,000 of equity in her home.
The plaintiff is eligible to receive $150 per week of child support from her first husband on behalf of her youngest daughter, now 17 years old. Her former husband has not paid child support for over one year.
The defendant has been an "oilman" his entire working life. For three generations, since 1943, his family has been in the oil business. His business, Moroni and Son, LLC, is a full service oil company on the Connecticut shoreline. The company provides commercial, residential and discount oil delivery, as well as oil burner and air-conditioning service and installation. When the defendant met the plaintiff, following the dissolution of his second marriage, he was raising his 15-year-old son, Matthew.
By all accounts, at least initially, the Yavarone-Moronis were a successful and happy blended family. Only two years into the marriage, however, the plaintiff was diagnosed with multiple brain tumors. She spent one month in the hospital and over a year undergoing rehabilitative treatment including physical and occupational therapy. In addition, she suffers from short-term memory processing problems, poor vision in her left eye and anxiety. Even today, she has difficulty with her balance, walking and talking. All the while she was in the hospital, the defendant cared for his wife and looked after her young girls and his son, taking excellent care of them. At some point prior to June 2006, however, the defendant commenced an intimate relationship with Teresa Schroeder. They are presently residing together. Shortly after the relationship was initially discovered (and denied), the plaintiff discovered the couple in Montauk, New York and she subsequently asked the defendant to leave the marital home. He has not been back since. The defendant has suffered his own health problems of late, including a thyroid condition and diabetes. In May 2009, he suffered a major heart attack and underwent surgery. He now looks forward to a period of increased exercise, a better diet, smoking cessation and reduced working hours. The court finds that the defendant's net weekly income is $1,275.
Ms. Schroeder is employed by Moroni Son LLC in an administrative capacity. She denies having an established hourly rate. She testified that she is paid sporadically, often donates her time to the business and is paid by Mr. Moroni "when he wants to and what he wants to."
C. Marital Property
The court finds that throughout the marriage each party made contributions to the acquisition, maintenance and preservation of the estate of the other and their joint assets. "There are three stages of analysis regarding the equitable distribution of each resource: first, whether the resource is property within § 46b-81 to be equitably distributed (classification); second, what is the appropriate method for determining the value of the property (valuation); and third, what is the most equitable distribution of the property between the parties (distribution)." Krafick v. Krafick, 234 Conn. 783, 792-93, 663 A.2d 365 (1995). This court finds the following properties to be marital property subject to equitable distribution for the reasons discussed below.
1 Real Estate
In 1998, the parties, contributing $65,000 each, purchased a lot and performed site work at 24 Cricket Court in Old Saybrook Connecticut. Thereafter, with a construction mortgage of $300,000, they built the marital home. The marital home is listed for sale for $644,000 and is now subject to a mortgage of between $560,000 and $585,000. The party's financial affidavits list different values for the home and different mortgage balances. No appraisals, testimony or additional information was provided to the court concerning valuation or the liabilities associated with the home. The defendant testified that the home requires approximately $20,000 to improve its market position. Both parties agree the home has no extractable equity.
2 Moroni Son, LLC
Moroni Son, LLC has provided the family with a comfortable lifestyle despite struggling over the years. When the defendant met the plaintiff in 1997, his credit was poor, in large part because of an earlier bankruptcy. The defendant and his business partner, Lenny Shaw, were in the process of separating their interests in a business known as Owl Oil. Some of the equity in the plaintiff's home was used to capitalize Owl Oil. After the separation from Lenny Shaw, the Moroni family moved their business interests from New Britain to Old Saybrook. In January 2001, the plaintiff and the defendant's brother, Jim Moroni, formed Jim Moroni's Oil Service, LLC. The two were its only members. The plaintiff rather than the defendant was a member of the company because the defendant did not wish to have any assets in his name in order to avoid the claims of his creditors. The defendant and his brother did virtually all of the work for the company. Although she was not compensated, the plaintiff received a weekly draw which she used for the benefit of her husband and their family. The parties shared their responsibility as follows: the plaintiff answered the phones and dispatched the work; the defendant delivered the oil and did basic service calls; and Jim Moroni was responsible for all major service, installation work and air-conditioning work. By the fall of 2002, Jim Moroni observed that amounts contained in the company's bank account appeared to fall short of the amounts that should be there based upon the amount of business generated by the company. Litigation between the plaintiff, the defendant and Jim Moroni followed, with judgment entering in favor of Jim Moroni. See Yavarone v. Jim Moroni's Oil Service, Superior Court, judicial district of Middlesex, Docket No. CV 03 0102318 (February 18, 2005, Aurigemma, J.).
After a trial in October 2004, the court, Aurigemma J., found that the plaintiff, Elizabeth Yavarone-Moroni, and the third-party defendant, Lawrence Moroni, intentionally and purposefully failed to disclose their actions to the defendant, Jim Moroni. They instructed customers to write checks to them personally and cashed checks made out to the company through third parties. They kept company funds and refused to turn over the funds received. The court found that Elizabeth and Lawrence intentionally and purposely interfered with the company and James Moroni by diverting funds and stealing money from the company and by soliciting customers to enter into contracts with Elizabeth and/or Lawrence personally. The court found that Elizabeth's and Lawrence's failure to disclose to Jim Moroni that they were not, in fact, sharing all of the receipts of the company with him deprived Jim Moroni of his rightful share in the company business. On February 18, 2005, judgment entered in favor of James Moroni on his counterclaims (alleging fraud and tortuous interference, theft and conversion and unfair trade practices) and against Elizabeth and Lawrence in the amount of $267,829. The judgment was satisfied, in part, by placing a second mortgage on Elizabeth's and Lawrence's marital home in the amount of $200,000. This is the primary reason the home has no equity at this time.
Despite these setbacks, the plaintiff and the defendant set forth once more to rebuild their business. Moroni Son, LLC, the company, was created. The plaintiff has a 70 percent ownership interest, the defendant has a 15 percent ownership interest and their principal licensed technician, Ray Sax, has a 15 percent ownership interest. The company operates its five delivery trucks out of its Spencer Plain Road facility in Westbrook Connecticut, servicing 2500 customers from Guilford to Middletown. The company also does business as Seagull Oil a discount supplier. The company had gross receipts of approximately $7 million in 2008. Additionally, the company provides health insurance for both parties. In 2008, the defendant received guaranteed payments from the business in the amount of $48,696, which were subject to losses of $26,833, resulting in taxable income of $21,863. The plaintiff received guaranteed payments of $56,400, which were subject to losses of $125,219, resulting in no taxable income. Although the plaintiff owns 70 percent of the company, and has, in the past, performed dispatching and minor bookkeeping responsibilities, she has no practical knowledge of the business and its operations. Rather, the defendant operates the company with his son Matthew, who has a master's degree in business administration. It is the defendant's hope that Matthew will continue the business the defendant's father started 65 years ago.
Ms. Yavarone's insurance costs $8,000 annually.
Despite being given ample opportunity to do so, neither party presented the court with any evidence concerning the value of the company. Neither party valued their interest in the business on their financial affidavits, no expert testified and no documentary evidence was presented. The plaintiff seeks a property award of $250,000 and argues that the court can value the business based on the income the defendant appears to draw from it, citing to his various expenses and lifestyle. The defendant, on the other hand, argues that the company has no value because "the accountant testified that liabilities exceeded assets and the company has substantial debt."
Both parties in a dissolution proceeding are required to itemize all of their assets in a financial affidavit and to provide the court with the approximate value of each asset. Practice book 25-30. See also Bornemann v. Bornemann, 245 Conn. 508, 535-36, 752 A.2d 978 (1998) (same).
The court finds that there is adequate evidence to impute income from the business to the parties for the purposes of awarding support. Carasso v. Carasso, 80 Conn.App. 299, 304, 834 A.2d 793 (2003), cert. denied, 267 Conn. 913, 840 A.2d 1174 (2004). Nevertheless, although the evidence, taken together, provides the underpinning for the reasonable conclusion that the defendant is earning or is capable of earning a certain level of income, it is not a substitute for evidence regarding the value of the company. Furthermore, there is absolutely no evidence available to assess the value of the company. As a result, any valuation of the company on this record is improper. See Turgeon v. Turgeon, 190 Conn. 269, 274, 460 A.2d 1260 (1983). Accordingly, the court makes no orders concerning the disposition of Moroni Son, LLC. See Sikiotis v. Sikiotis, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. FA 03 0197480 (March 3, 2008, Shay J.).
"When faced with the constraints of incomplete information, a court cannot be faulted for fashioning an award as equitably as possible under the circumstances." Commissioner of Transportation v. Larobina, 92 Conn.App. 15, 32, 882 A.2d 1265, cert. denied, 276 Conn. 931, 889 A.2d 816 (2005).
3 Additional Assets and Liabilities CT Page 1810
The plaintiff operates a 2006 Jeep with a value of $16,000 and a loan balance in the same amount. She also maintains a 1993 Volvo with no value for her daughter's use. She has checking and savings accounts totaling $1,400. The plaintiff is the owner and beneficiary of a $500,000 term policy in the life of the defendant. The policy was obtained at the time of their marriage, in part, to secure her initial investments in the oil businesses. She has always paid the premiums, although she has occasionally borrowed money from family members in order to do so. The plaintiff is the titled owner of an older 40' wooden sportfish boat, the "Lucky Liz," which has been primarily utilized by the defendant and Ms. Schroeder in Montauk, New York. No value was given to the court for this yacht.The defendant owns a 1979 Ford pickup with a value of $500 and owns a 2008 Mako fishing boat with a value of $55,000 and a loan balance of $55,296.
Excluding the company, which the court is unable to value, the combined assets of the parties have a value of $3,000. There are no deferred assets.
4 Motion for Order and Further Relief
The plaintiff alleges that on April 8, 2009, the defendant purchased a 26 foot Mako boat "by trading marital property, using marital cash funds and incurring substantial new debt, the total cost of the purchase being in excess of $100,000." The plaintiff also alleges that the defendant diminished the value of the company by diverting funds to Matthew and diverting and concealing $100,000 in an account in the name of Ms. Schroeder. The plaintiff seeks a finding that the defendant's actions are in violation of the automatic orders or litigation misconduct. The plaintiff asks that the court hold the defendant in contempt.
On this issue the court makes the following additional findings. On or about April 10, 2009, the defendant traded the plaintiff's 2003 23' Mako boat subject to a loan of $45,000, for a 2008 26' Mako with the purchase price of $63,296. The transaction required a cash down payment of $8,000, which was contributed by Ms. Schroeder. The defendant assumed a new loan of $55,296, and was motivated to undertake the transaction, in part, to remove the plaintiff from the $45,000 loan on the 2003 vessel. The transaction was undertaken with the plaintiff's knowledge and acquiescence. The defendant operates a 2002 Chevy pickup which was given to his son, Matthew in August 2009, for "estate planning purposes after his heart attack." The defendant testified that he sold the pickup to Matthew for $1,000 less than its book value. Matthew denies paying anything for the vehicle, which he valued at $4,000-$5,000. Matthew resides in an efficiency apartment above the company. He does not pay rent or utilities, but he does provide a service to the company by watching over the yard and equipment.
Connecticut procedure authorizes motions for contempt, one of the few vehicles available to force compliance with court orders. The burden of establishing a prima facie showing of contempt, in this case the willful disobedience of a court order, falls upon the plaintiff. "To constitute contempt, a party's conduct must be willful . . . Noncompliance alone will not support a judgment of contempt." (Internal quotation marks omitted.) Adams v. Adams, 93 Conn.App. 423, 431, 890 A.2d 575 (2006). "An order of the court must be obeyed until it has been modified or successfully challenged." (Internal quotation marks omitted.) Eldridge v. Eldridge, 244 Conn. 523, 530, 710 A.2d 757 (1998).
The court is unable to ascertain from the record whether the Chevy pickup was owned by the company or the defendant. Furthermore, the court cannot ascertain whether the defendant sold the vehicle to Matthew or managed the transaction. In addition, it is not clear what the vehicle is worth. Although the circumstances surrounding the transfer of the 2002 pickup to Matthew are questionable, the court is unable to ascertain the impact, if any, of the transaction on the value of the parties' respective estates. No evidence was presented that the defendant diverted or concealed money in the name of Ms. Schroeder.
Consequently, the motion for order and/or further relief is denied.
II ORDERS
Based on the foregoing finding of facts, the court orders the following:
1. The marriage of the parties is dissolved on the basis of irretrievable breakdown.
2. The plaintiff shall transfer all of her right, title and interest in the real estate at 24 Cricket Court to the defendant within 45 days. The defendant shall be solely responsible for the payment of all mortgages and debts secured on the property as well as all taxes, utilities and expenses. The defendant shall indemnify and hold the plaintiff harmless on the same.
3. The defendant shall pay periodic alimony to the plaintiff in the amount of $600 per week. Alimony shall terminate on the earliest of the following events: (a) either party's death; (b) the remarriage of the plaintiff; or (c) eight years from the date of the dissolution of the marriage. The statutory provisions of General Statutes § 46b-86(b) shall apply if the plaintiff cohabits or lives with another person. Alimony shall be nonmodifiable as to term.
General Statutes § 46b-86(b) provides: "In an action for divorce . . . [or] dissolution of marriage . . . brought by a husband or wife, in which a final judgment has been entered providing for the payment of periodic alimony by one party to the other, the Superior Court may, in its discretion and upon notice and hearing, modify such judgment and suspend, reduce or terminate the payment of periodic alimony upon a showing that the party receiving the periodic alimony is living with another person under the circumstances which the court finds should result in the modification, suspension, reduction or termination of alimony because the living arrangements cause such a change of circumstances as to alter the financial needs of that party."
4. The plaintiff shall pay periodic alimony to the defendant in the amount of one dollar per year. Alimony shall terminate on the earliest of the following events: (a) either party's death; (b) the remarriage of the defendant; or (c) eight years from the date of the dissolution of the marriage. The statutory provisions of General Statutes § 46b-86(b) shall apply if the plaintiff cohabits or lives with another person. Alimony shall be nonmodifiable as to term.
5. The plaintiff shall be the sole owner of the 2006 Jeep, the Volvo, the New Alliance checking account and the Webster savings and checking accounts. The plaintiff shall be responsible for all costs and expenses associated with the vehicles and shall indemnify and hold the defendant harmless with respect thereto.
6. The defendant shall be the sole owner of the 1979 Ford pickup, the vessel Lucky Liz and the 2008 Mako boat. The defendant shall be responsible for all costs and expenses associated with said boats and vehicles and shall indemnify and hold the plaintiff harmless with respect thereto.
7. Remaining personal property: the plaintiff shall be the sole owner of the home furnishings remaining at 24 Cricket Court. The defendant and the plaintiff shall each retain his or her own clothing, jewelry and other personal effects, including items he or she may have received as gifts from the other party.
8. The plaintiff shall retain ownership of the life insurance policy in the amount of $500,000.
9. For so long as the parties have an alimony obligation to each other, the parties shall annually exchange their W-2s, 1099s, K-1s and returns by February 15 of each year and shall provide each other with their federal tax returns within five days of filing.
10. The defendant shall maintain health insurance for the plaintiff for five years. The cost of premium payments for the plaintiff's policy shall be the sole responsibility of the defendant and shall be considered alimony, deductible by the defendant. The defendant shall be responsible for his own health insurance.
11. Each party shall be responsible for their respective attorneys fees, for to order otherwise would undermine these financial orders.
12. The parties shall be solely responsible for and hold the other harmless from the remaining liabilities and debts shown on their respective financial affidavits.
13. Each party is ordered to sign whatever documents are necessary and, as presented to them by the other party, to effectuate these orders.
These orders are effective immediately.