Officially released May 21, 2019.
In Short: Knowledge by the other party that an undisclosed asset might exist does not alleviate the duty to disclose the asset; due diligence is required in preparing the financial affidavit; $200,000 or 1.5% of the marital estate was not a de minimis omission; the trial court may award postjudgment interest while an appeal is pending on the underlying amount due (although it may not be collected during pendency of the appeal).
The Facts: The parties’ marriage was dissolved by incorporation of a separation agreement in 2011. The separation agreement included a provision stating “In the event of a material omission or misstatement by either party in his or her affidavit, the other party shall have the right to rescind this [a]greement and reopen and reform any judgment entered in the pending action incorporating the terms hereof.” The separation agreement entitled the non-omitting party to 75% of the undisclosed assets value measured at time of dissolution plus fees and costs.
The trial court granted a motion to open and reform the parties’ marital dissolution judgment based on Husband’s failure to disclose a bank account and a parcel of real property, based on the terms of the separation agreement. The trial court had found that Wife had only “conflicting” and “unverified reports” that raised the possibility of the existence of the real property. The trial court found that Wife had opened the bank account herself in Husband’s name, but that she did not receive the statements for the account, Husband had signed the account opening document twice, and Wife did not know the account was still open. The trial court also found that Wife was under pressure to complete the dissolution so that she would not be denied a get and that she knew she could take advantage of the article regarding non-disclosure if she later found proof.
The trial court awarded Wife $179,109 for 75% of the value of the undisclosed assets at time of Judgment and $194,123 as reasonable attorney’s fees. Husband appealed the opening of the Judgment. Wife thereafter filed a motion for post-judgment interest and was awarded such at 5%. Husband filed an amended appeal challenging that award.
The First Issue on Appeal was whether Husband made material omissions. Husband argued that (1) Wife knew about the real estate at time of Judgment, (2) that the omissions were of no great consequence and that trial court overvalued them in determining whether nondisclosure was material, and (3) there was no evidence that Husband knew about the bank account. The Appellate Court Held that the abuse of discretion standard of review applied to a motion to open the judgment. The trial court was free to reject the evidence that Wife knew about the assets and there was nothing in the agreement to support an exemption from the duty to disclose even if the other party knew of the existence of an asset. Further, the non-disclosure of over $200,000 of assets could not be deemed de minimis in this case, even if, as Husband argued, it constituted only 1.5% of the total value of the estate. Finally, there was evidence that Husband knew the account was open and made no effort to close the account. He could have exercised due diligence and disclosed the account on his affidavit. The Appellate Court relied on Billington v. Billington, 220 Conn. 212, 222 (1991) regarding the heightened duty to disclose.
The Second Issue on Appeal was whether the trial court improperly awarded statutory prejudgment interest under § 37-3(a) where Wife first requested it in a posthearing brief and it was awarded after the automatic appellate stay had taken effect on the original appeal pursuant to Practice Book § 61-11. The Appellate Court held that prejudgment interest is an equitable determination lying within the discretion of the trial court and need not be specifically claimed in the demand for damages. Such damages are permissible in domestic relations cases where appropriate and equitable. See Picton v. Picton, 111 Conn. App. 143, 155 (2008), cert. denied, 290 Conn. 905 (2009). Ordinarily postjudgment interest awards are reviewed for abuse of discretion, however, whether such award violated the appellate stay is a matter of law and subject to plenary review. The award of postjudgment interest was not precluded by the appellate stay because it did not enforce or effectuate the judgment, it merely increased the measure of damages which might ultimately be enforced. “Although the effect of the court’s decision was to increase the damages the defendant would be entitled to collect if she successfully defended against the appeal, she nevertheless continues to be denied the fruits of her victory because she will be unable to secure payment from the plaintiff by executing on the judgment until the appeal is disposed and the automatic stay has expired.”
The Judgment was affirmed.