Officially released November 6, 2018.
In short: (1) discovery sanctions must be proportional to a clear violation and may include preclusion of testimony and other evidence as to financial condition, (2) in a contested matter, the court may not order arbitration as a means of addressing property division and is responsible for division of personal property, (3) do not list a debt to your client that your client cannot collect as an asset on your client’s financial affidavit.
This appeal can most easily be divided into three discrete issues.
First, Defendant claims that the trial court abused its discretion by entering sanctions in the form of precluding Defendant from testifying about his current financial condition and business for failure to comply with discovery requests.
Defendant owned a closely held construction business with his son. On June 13, 2016, Plaintiff served a request for disclosure and production. Nine months later, on March 21, 2017, Plaintiff filed a motion for order of compliance, including such basic requests as three years of personal and business tax returns, a sworn financial affidavit, general ledgers, profit and loss statements, and bank statements. On April 10, 2017, at a hearing on the motion for order of compliance, Defendant’s counsel represented that the documents were being prepared and would be available in one week, by April 17. The Court ordered compliance in one week and reserved the issue of sanctions for the trial judge.
According to Plaintiff’s subsequently filed motion to preclude, prior to the deadline, “Defendant provided an amended financial affidavit, a mortgage statement, documents regarding capital improvements, a passport, two handwritten receipts for children’s expenses, photographs of the children, and a membership letter from Stepping Stone Children’s museum.” Trial began on April 18. Defendant blamed his accountant for failure to produce the documents. The trial court was suitably unimpressed and entered the aforementioned sanctions.
The Appellate Court quoted Millbrook Owners Assn., Inc. v. Hamilton Standard, 257 Conn. 1, 776 A.2d 1115 (2001) for the three requirements that must be met to uphold a sanction for violation of a discovery order. (1) The discovery order must be reasonably clear or the sanction party must have understood the order irrespective of clarity. This is a question of law subject to de novo review. (2) The record must establish a violation of the order, a question of fact subject to the clearly erroneous standard. (3) The sanction must be proportional to the violation, a question that is reviewed for abuse of discretion. The factors to be considered include the willfulness or bad faith in non-production and prejudice to opposing party.
Here, Defendant did not contest that the order was clear. The record reflects that Defendant’s counsel represented that the documents would be produced, and the lack of production was undisputed. The Appellate Court determined that the sanctions were proportionate and affirmed this aspect of the judgment.
Second, the Defendant claims the trial court failed to enter a property distribution order as to personal property, leaving him without a remedy. Defendant further claimed that in the process of doing so, the trial court modified a property settlement, post-judgment.
The trial court’s order provided that the parties, if unable to agree as to division of personal property, would submit to binding arbitration with an agreed-upon arbitrator, or the court would make such appointment. Plaintiff filed a motion for order to effectuate the judgment, requesting mediation through family relations and that the court retain jurisdiction over such referral. The court amended the order to require mediation with family relations, but did not retain jurisdiction over the referral. Both parties acknowledged that the trial court was without authority to order arbitration.
The Appellate Court found the order of mediation to be merely effectuating the underlying order, rather than modifying it. The Appellate Court determined that the issue at hand was improper delegation of judicial authority, providing for plenary review. However, in entering its order without retaining jurisdiction, it impermissibly left the parties in a state of perpetual limbo, without remedy. The Appellate Court reversed and remanded the decision as to personal property division, but found this order severable from the mosaic due to the minimal value of the property in question compared to the value of the entire estate that was divided.
Thirdly, Defendant claimed that the court abused its discretion by awarding him a chose in action for $495,000 against Plaintiff’s father and ordering him to pay $67,500 to Plaintiff’s father. Defendant argued that the money was uncollectable and that, without it, his award was disproportionately low compared with Plaintiff’s. Defendant further argued that he lacked the means to pay the $67,500 and it was illogical to order him to pay a debt to a person who owes him more money.
Defendant’s own financial affidavit listed as an asset a $495,000 debt owed to him by Plaintiff’s father, ostensibly for work that Defendant performed on property in Poland. Neither party contested that a chose in action was subject to distribution. No evidence was presented as to inability to collect on the debt.
Defendant’s financial affidavit demonstrated assets (in pianos alone) valued at greater than $67,500. The Appellate Court found no authority to support the claim that he cannot be ordered to pay a debt to a person who owes him more money. The judgment was affirmed as to this issue.