Marshall v. Marshall, 200 Conn. App. 688 (2020) (modification of alimony; implementation of ambiguous formula for alimony from separation agreement; contempt; scope of remand; law of the case; contempt)
Officially released October 6, 2020.
Officially released October 6, 2020.
In Short: (1) Be very careful when crafting language defining income and formulas for purposes of alimony and child support; (2) advancing many legal theories on appeal does not increase the likelihood of prevailing.
The parties married in 1981, had four children, and were divorced by agreement in 2007 at which time one child was still a minor. The separation agreement provided Article 4, entitled “alimony and child support.” It specified that for purposes of that article, pre-tax income form employment shall include only salary and cash bonus received by Husband in cash or check before deductions. It specifically excluded from the definition of pretax income subchapter S distributions from Husband’s ownership in 40% of a corporation and other like distributions.
Article 4 further provided that Husband was to pay unallocated support equal to 40% of his pre-tax income, which they stipulated to be $192,000 per year, based on reasonable compensation levels derived from a joint appraisal of Husband’s interest in his company. Husband was to immediately notify Wife of any change to that amount. Article 4 provided that either party may move for modification based on a substantial change in the nature of Husband’s compensation or Husband’s employment/ownership in his company.
Husband paid alimony of $76,010 in 2008, $17,200 in 2009, and no alimony in 2010 and 2011. In august of 2011, Husband filed a post-judgment motion to modify alimony on the grounds of substantial change. Wife thereafter filed a motion for contempt and sought counsel fees and statutory interest. The trial court denied the contempt motion, awarded no fees or interest, and granted the motion to modify. Wife appealed claiming that the trial court erred in calculating the alimony owed under the agreement by calculating it based on Husband’s W-2 only. The Appellate Court, in its prior appeal, found that the agreement was ambiguous, and that the trial court therefore erred by not engaging in fact-finding as to the intent of the parties. The matter was remanded to determine the intent of the parties and the arrearage. The Appellate Court also addressed Wife’s claim that the trial court improperly granted the motion to modify alimony, finding that the trial court erred in comparing “apples and oranges” by comparing income inclusive of benefits with only W-2 income in finding a 60% change in income, and remanded for further proceedings on that issue as well.
On remand the trial court bifurcated the proceedings to first determine whether any or all of Husband’s K-1 income would be included in the modification hearing, and to then hold a second hearing to establish the amount of Husband’s income and rule on the modification. At the first part of the hearing, counsel for the parties from the dissolution both testified as did the accountant who valued the business. The trial court concluded that the intention of the parties was to consider income including some distributions from the business, regardless of the fact that Husband kept and excluded his interest in the company. At the second part of the hearing the trial court heard testimony of both parties, Husband’s former business partner and expert witnesses of both parties. Husband’s expert testified as to his reasonable compensation based on the same method used by the accountant at time of trial. The trial court used the reasonable compensation method to determine Husband’s pre-tax income for each year and calculated the arrearage owed. The trial court further found a substantial change in circumstances and modified alimony to zero retroactive to September 1, 2011. The trial court granted Wife’s motion for contempt only as to the finding of the arrearage.
Wife appealed, arguing that (1) the trial court exceeded the scope of the remand orders on her prior appeal, (2) failed to abide by the law of the case as established by the trial court and in the prior appeal, (3) allowed Husband to claim that his alimony obligation should be determined using reasonable compensation when he had not made that argument prior to the hearing on remand, (4) used reasonable compensation for calculating Husband’s alimony obligation when the separation agreement did not provide for that method, and (5) retroactively modified Husband’s alimony obligation for a period of nearly four years prior to the motion to modify.
Wife’s first argument on appeal was that the trial court exceeded the scope of remand, arguing that the Appellate Court never instructed the trial court to determine whether the agreement required application of the formula to Husband’s pretax income or reasonable compensation. The standard of review for scope of remand is plenary. The Appellate Court rejected Wife’s narrow interpretation of the remand order and found the trial court’s actions wholly consistent with it.
Wife’s second argument on appeal was that the trial court erred in not following the law of the case by basing Husband’s alimony obligation on reasonable compensation instead of pre-tax income. The application of law of case doctrine is subject to plenary review. The Appellate Court determined that the trial court was not bound to follow the calculations of the previously overturned trial decision, and it acted within the scope of remand and consistently with the law of the case in entering its orders.
Wife’s third argument on appeal was that the trial court improperly allowed Husband to claim that his alimony obligation should be calculated based on his reasonable compensation when he had not made that argument until the remand hearing. Wife argued based on the principle that an appellant who fails to brief a claim abandons it, and that Husband’s failure to cross appeal from the trial court’s first opinion precluded him from arguing using reasonable compensation on remand. The Appellate Court held that as appellee, Husband was not bound by this principle and was free to advance a theory that he did not advance in prior proceedings.
Wife’s fourth argument on appeal was that the trial court erred by improperly using Husband’s reasonable compensation as the basis for alimony calculations, arguing that the agreement did not provide for that method. As the agreement was previously determined to be ambiguous, the clearly erroneous standard of review governed this issue. The Appellate Court concluded that the use of reasonable compensation was supported by the evidence in the record and not clearly erroneous.
Wife’s fifth and final argument on appeal was that the trial court erred by improperly modifying the alimony for a period of nearly four years prior to Husband’s motion to modify. Husband argued that the calculation of the amount due based on the formula from the original agreement was necessary and proper. The Appellate Court applied plenary review to the application of law to the facts. The Appellate Court found that the trial court did not engage in modification of alimony for the years prior to the motion, but interpreted and effectuated the alimony provision of the agreement as ordered on remand. Separate from that, the trial court found a substantial change in circumstances and modified the order retroactive to a date after date of service, which was consistent with § 46b-86.
The Judgment was affirmed.