Officially released September 29, 2020.
In Short: (1) The trial court may modify a property settlement within four months of Judgment pursuant to Conn. Gen. Stat. § 52-212a; (2) the title of a motion may not be dispositive of the relief that may be granted.
Wife owned 10% and Husband 90% of a company that the parties founded. The dissolution action was tried, and the trial court issued a decision ordering, inter alia, that Husband transfer 50% of his interest, with 10% as a taxable constructive distribution and 40% as transfer incident to divorce, with further specifics as to how the same would be effectuated, including direction as to corporate documents to be implemented. Such implementation included establishing a deferred compensation structure to buy out a portion of the interest.
Within four months of the decision, Wife filed a motion seeking to “clarify and effectuate” the judgment to explain whether it intended that she receive her 40% transfer of the company incident to divorce tax free, “regardless of references in the [dissolution] judgment to specific corporate documents…” Wife argued that the trial court intended the transfer to be tax free, despite ordering it to be paid by way of a deferred compensation agreement, which would result in her having a tax burden. Wife sought an order that Husband sign a redemption agreement that would provide her the entire sum tax free.
Husband filed a combined response and request for clarification, arguing that Wife’s motion sought to change the terms of the judgment. Wife responded with a reply brief contending that the trial court’s orders constituted property assignments intended to be tax free, conceding that a deferred compensation agreement was not the proper mechanism to do so, and maintaining that the court’s intent was that the transfer be tax free.
The trial court granted Wife’s motion without hearing stating that it was “clarifying” the terms of the Judgment and ordered that the transfer be tax free, irrespective of references in the judgment to specific corporate documents. Husband filed a motion to reargue, which was given a hearing, but then denied, with a further order that Wife would pay no taxes on the money she receives under the redemption agreement.
Husband appealed the post-judgment orders. Husband claimed the trial court’s post-judgment order resulted in modification rather than clarification because it substantively altered the dissolution judgment’s provisions regarding the deferred compensation agreement and the tax effect thereof.
The Appellate Court applied plenary review to the construction of the judgment and agreed that the trial court modified the judgment rather than clarifying it. The trial court’s post-judgment orders cancelled substantive elements of the original judgment and entered new elements in its place.
Wife argued that the trial court possessed authority under Conn. Gen. Stat. § 52-212a to open and modify the judgment within four months. Husband argued that the trial court abused its discretion as the motion was to “clarify” not to “modify.” The Appellate Court held that the title of the motion was not dispositive. The substance of the relief sought was modification and Husband was aware of the purpose of the motion and relief sought as he argued the issue before the trial court. The Appellate Court found no abuse of discretion and affirmed.