Officially released April 23, 2019.
In Short: on retrial after a motion to open, assets are to be valued as of date of dissolution regardless of any intervening dissipation; alimony cannot be awarded simply as a percentage of gross income.
The Facts: The parties were married in 1990, had two children, and commenced divorce proceedings in 2012. In Husband’s two financial affidavits during the course of the dissolution his disclosed assets totaled value less than $2,000.
The trial court entered orders that Husband pay 35% of gross income in excess of $150,000 per year and unallocated alimony and child support of $5,500 per month. All marital assets were awarded to Wife.
Wife filed a post-judgment motion for contempt alleging failure to comply with the support orders and other motions followed. Wife discovered that Husband had taken hundreds of thousands of dollars of withdrawals from undisclosed IRA assets.
The Judgment was opened on the basis of fraud. The trial court denied Wife’s motion to limit the retrial to issues of discovery and distribution of marital assets, opening the judgment as to all matters. Further discovery turned up a defined benefit pension plan that Husband, post-judgment, had taken a lump sum early withdrawal from and then withdrew and depleted by over half a million dollars.
On the retrial the trial court ordered 100% of the (less than $50,000) value of the remaining IRA assets transferred to Wife and ordered alimony of $3,000 per month plus 33% of gross earnings by Husband in excess of $100,000 per year until death, stating “the plaintiff can never be made whole for her loss.” Wife appealed the decision. The trial court articulated that it considered the value of the pension at the time of the original dissolution and then the intervening circumstances that converted and reduced the asset.
The First and Primary Issue on Appeal was whether the trial court erred in failing to value the pension as of date of dissolution. The Appellate Court Held that the date of valuation of assets must be the date of the original decree. Sunbury v. Sunbury, 216 Conn. 673, 676 (1990). In “the absence of any exceptional intervening circumstances, the date a dissolution of marriage is granted is the proper time to determine the value of the parties’ estate upon which to base division. An increase in the value of property following the date of dissolution does not constitute an exceptional circumstance…. Logically, there is no reason why the same date should not be used when there has been a decrease in the value of property.” Kremenitzer v. Kremenitzer, 81 Conn. App. 135, 139-40 (2004). Dissipation of assets after the judgment does not constitute an exceptional intervening circumstance.
The Second Issue of Substance on Appeal was whether the trial court erred in basing alimony orders on the parties’ gross income instead of net. The Appellate Court Held it “is well settled that a court must base its child support and alimony orders on the available net income of the parties, not gross income…. Whether an order falls within this prescription must be analyzed on a case-by-case basis…. [W]e differentiate between an order that is a function of gross income and one that is based on gross income.” Procaccini v. Procaccini, 157 Conn. App. 804, 808 (2015). Here the trial court erred by using the gross income itself rather than by calculating orders “as a function of gross income.”