Officially released November 17, 2020
In Short: This very detailed opinion which (1) addressed the distinction between an alimony award as a function of gross income versus based on gross income, (2) upheld the trial court decision to “secure” its order retaining jurisdiction over post-secondary education by ordering money to be invested in 529 accounts pursuant to § 46b-56, (3) reiterated that you cannot be found in contempt unless a contempt motion has been filed pleading the specific contemptuous conduct, (4) reiterated that remedial orders may enter for violations of the automatic orders even without contempt and provided an analysis of the “usual course of business,” (5) upheld the trial court’s decision not to assign an earning capacity to a homemaker, and (6) analyzed counsel fees awarded under § 46b-62 for the purpose of avoiding undermining other orders.
The parties were married in New York City in 2006. Both were immigrants from the former Soviet Union who became citizens and spoke fluent English. They had two minor children, ages three and four at time of Judgment. The children resided primarily with Wife in a condominium owned by the parties after they separated in 2017.
Husband was 39 years old, had an annual base salary of $400,000 and received additional annual discretionary bonuses, including $508,500 received in 2017 and an anticipated $550,000 in 2018. Wife was thirty-five years old and suffered from poor vision and very poor hearing. She had a master’s degree in business administration but had not been fully employed since 2012. The parties had spent $60,000 that had been gifted to the parties’ children on renovations to the marital residence.
The trial court was critical in particular of Husband’s lavish spending during the pendency of the dissolution, such as $10,000 to rent a ski lodge. Husband also incurred a $22,000 loss on cryptocurrencies during the dissolution. Husband had carried on an extramarital affair for some time and was found to have contributed more than Wife to the breakdown of the marriage.
Wife had filed a pendente lite motion for contempt against Husband for the rental of the ski lodge and sought to be made whole for the cryptocurrency investment but did not file a contempt motion as to the cryptocurrency investment. At trial, the court addressed this motion and ordered Husband to pay $16,000 from his share of the bonus proceeds to offset his two violations of the automatic orders and found him in contempt.
Husband was ordered to pay $40,000 of Wife’s legal fees so as not to undermine the purposes of the other financial awards. Husband was ordered to pay $6,200 per month alimony as well as supplemental alimony in the form of 20% of his gross bonus award, up to $250,000, and 10% of such gross up to $750,000. Wife was given a $35,000 safe harbor. Each of the parties was ordered to contribute $30,000 to 529 plans on behalf of the children, in light of the use of the $60,000 gift to the children on renovating the marital home.
Husband appealed and Wife filed two motions for counsel fees regarding postjudgment motions and to defend the appeal. The trial court granted both motions, providing an additional $10,000 for postjudgment litigation and $20,000 to defend the appeal, and Husband amended his appeal to include those orders.
Husband argued that the trial court (1) abused its discretion by improperly basing supplemental alimony on his gross rather than net income, (2) exceeded its statutory authority by ordering the parties to establish and contribute to 529 plans for the children’s college, (3) exceeded its statutory authority by finding Husband in contempt with no contempt motion pending as to the cryptocurrency investment, (4) abused its discretion by finding Husband in contempt for expenditures within the “usual course of business” exception, (5) abused its discretion by failing to attribute an earning capacity to Wife for alimony and child support, and (6) violated § 46b-62 in an award of counsel fees during the dissolution, for postjudgment matters and for the appeal.
The Appellate Court rejected Husband’s claim that the trial court abused its discretion by basing the supplemental alimony award on gross, rather than net, income. The Appellate Court noted that the trial court had both financial affidavits and child support guidelines before it as well as the parties’ joint tax returns for three years, although Husband did not disclose his bonus income in his financial affidavit or guideline worksheet. The Appellate Court cited case law that differentiates between an order that is a function of gross income and one that is based on gross income, quoting Procaccini v. Procaccini, 157 Conn. App. 804 (2015) for the premise that “an order that takes cognizance of the parties’ disposable incomes may be proper even if it is expressed as a function of the parties’ gross earnings.’” The Appellate Court reasoned that the trial court intended its supplemental alimony order to be a function of gross bonus income, which is a “convenient and economical method of calculation” and had ample evidence before it with respect to the net bonus income, and therefore did not abuse its discretion.
The Appellate Court rejected Husband’s argument that the trial court exceeded its statutory authority by ordering the parties to contribute to 529 plans for the children. Husband argued that § 46b-81 provided no authority for the court to make future investment decisions for the parties. The Appellate Court concluded that the trial court imposed this order under § 46b-56 to secure its orders as to post-secondary education. The Appellate Court further concluded that the trial court is entitled to provide security for the enforcement of a future educational support order under § 46b-56, even where it has retained jurisdiction to make such an award in the future, citing Sander v. Sander, 96 Conn. App. 201 (2006) for an example of such security.
Regarding Husband’s third and fourth claims pertaining to the automatic orders under Practice Book § 25-5, the Appellate Court held that it was abuse of discretion for the trial court to hold Husband in contempt for conduct for which no contempt motion was pending as to the cryptocurrency, but that the trial court’s remedial order regarding the expenditures was not abuse of discretion, as the evidence did not support Husband’s claim that the expenditures were within the “usual course of business” for him and the court has the authority to compensate a spouse for losses caused by violations of the automatic orders even in the absence of a finding of contempt. Only the finding of contempt itself was reversed.
The Appellate Court rejected Husband’s claim that the trial court abused its discretion by failing to attribute an earning capacity to Wife for alimony and child support. The trial court may, under appropriate circumstances, base financial awards on an earning capacity rather than actual earned income, particularly in the evidence of fault for loss of income, but the trial court has substantial discretion not to do so as well. Wife’s decision to be available to the young children coupled with her health issues provided the trial court with ample bases not to award an earning capacity.
The Appellate Court rejected Husband’s argument that the trial court erred in awarding counsel fees during the dissolution. Under § 46b-62 the court may award fees based on the criteria of § 46b-62, the alimony statute. The focus of § 46b-62 is either where a party lacks ample liquid assets to cover legal expenses or where the failure to award them will undermine the court’s other financial orders. The trial court expressly relied on the latter aspect. Wife was in a far less capable position to acquire assets in the future for some time based on the facts of this case, and thus it was not abuse of discretion to award her $40,000 in fees, approximately one half of what she incurred, so as not to undermine the other orders. The Appellate Court further rejected Husband’s argument that the trial court erred in awarding $10,000 for postjudgment litigation and $20,000 to defend the appeal. § 46b-62 is applicable to post-judgment proceedings and appeals. Husband argued that the trial court’s reference to the ski lodge he rented pendente lite was a sign of error or a punitive nature to the award. The Appellate Court provided presumptions in favor of the trial court regarding its findings and found the award to be reasonable and not abuse of discretion. The Appellate Court noted that the trial court was further particularly justified in entering a postjudgment counsel fees award where, just months earlier, such an award had been deemed necessary to avoid undermining the other orders.
The Judgment was reversed only as to the finding of contempt and remanded to vacate that finding. All other orders were upheld.