Officially released May 15, 2018.
Short version: the choice of which DRO method used to divide a defined benefit pension makes a huge difference on what the marital portion will be. Pensions are property. Proving fault in loss of job for alimony requires more than hints and allegations.
This case involved three issues from the cross appeals of the parties.
First issue: whether the term “marital portion” as used in the separation agreement clearly and unambiguously requires the use of the coverture fraction method for calculation. The parties did not dispute that “marital portion” refers to the amount of pension benefit earned during the marriage and agree that Plaintiff was to receive fifty percent of that portion.
The Defendant accrued twenty-four years of contributions to his defined benefit pension prior to the marriage and thirteen years during the marriage. The difference between using the subtraction method and the coverture fraction method to define the marital portion was substantial: payment of 17.02% of monthly benefit versus payment of 36.7% of monthly benefit.
The agreed-upon drafter of the DRO testified that the term “marital portion” is ambiguous, but that, absent other instruction, she uses a coverture fraction and does not use the subtraction method. The trial court issued an order finding that the term is unambiguous as to coverture fraction.
Separation agreements are construed as contracts. When a contract is unambiguous within its four corners the interpretation is a matter of law. When there is ambiguity the termination of intent is a question of fact and must be reviewed under the “clearly erroneous” standard. Remillard v. Remillard, 297 Conn. 345, 354-55, 999 A.2d 713 (2010).
The Appellate Court concluded that the emphasis on the expert’s usual practice was misplaced. The trial court should have, instead, been focused on the intent of the parties. The Appellate Court held that there is more than one methodology employed to determine a marital portion, and thus, the term is not unambiguous. The trial court was instructed, on remand, to determine whether all financial orders must be therefore reconsidered under the mosaic doctrine depending on the method to be used.
Second issue: whether the trial court erred in denying Defendant’s post-judgment motion for alimony modification. Defendant filed a post-judgment motion to modify alimony alleging both loss of his employment and an increase in Plaintiff’s income due to receipt of a settlement from unrelated litigation. The trial court determined that (1) Defendant’s job loss was due to his own fault, (2) Defendant’s monthly pension constituted income for purposes of alimony, and (3) settlement proceeds from the unrelated litigation should not be considered. The trial court denied Defendant’s motion to modify.
Review of a modification for alimony is governed by the “abuse of discretion” standard with review of factual findings limited to the “clearly erroneous” standard. The party seeking modification bears the burden in proving a substantial change in circumstances. Spencer v. Spencer, 177 Conn. App. 504, 526-27, 173 A.3d 1 (2017). The court may not consider income alone, but must also consider the overall circumstances. Coury v. Coury, 161 Conn. App. 271, 283, 128 A.3d 517 (2015). The change in ability to pay cannot be the payor’s own fault. Tittle v. Skipp-Tittle, 161 Conn. App. 542, 551, 128 A.3d 590 (2015).
The Appellate Court found that the evidence presented regarding fault as to loss of employment, an unsigned employment separation agreement and a third party’s revised complaint against Defendant, was insufficient to support the finding of fault. The Appellate Court noted Defendant’s clean personnel record and the absence of any testimony as to Defendant’s fault. The Appellate Court determined that the finding of fault as to the job loss was clearly erroneous and remanded the denial of the motion on that issue alone. The Appellate Court noted, in the interest of judicial economy, that (1) the receipt of settlement funds from separate litigation was already addressed in the separation agreement and it was not error for the trial court not to consider it, and (2) that there was no error in the trial court’s considering Defendant’s income from his pension as part of the totality of circumstances.
Third issue: whether the trial court erred in requiring Defendant to make payments from his pension plan retroactive to the date of dissolution. The trial court held, post-judgment, that Plaintiff’s portion of monthly pension benefits were part of property distribution and must be calculated from date of dissolution.
The Appellate Court noted that the relevant language stated that the transfer of Defendant’s pension included the word “immediately transfer.” Pension benefits are a form of property and the trial court was correct to determine that the amount of benefits to be transferred should not depend on the timing of processing of paperwork. The Appellate Court did, however, find that an appropriate tax adjustment must be calculated and directed such adjustment upon remand.