Overley v. Overley, 268 A.3d 691 (2021) (order precluding deduction of alimony improperly contradicted prenup; continuance denial not an abuse of discretion)
Officially released December 28, 2021
In Short: (1) Claims not made at trial are not reviewable and you cannot take contrary positions on appeal to positions taken at trial; (2) an order precluding tax-deductibility of alimony in contravention of a prenuptial agreement (“Prenup”) was in error in that it precluded such deduction if/when the tax law may permit it; (3) the trial court’s denial of Husband’s continuance request was not abuse of discretion.
The parties were married in New York in 2006. Prior to the marriage, they executed the Prenup, providing, inter alia, that either party may seek an equitable distribution of marital assets if total assets were worth below a certain threshold, that Wife was entitled to alimony which would be taxable to Wife as income and deductible to Husband, and that it would be governed by the laws of New York.
The parties moved to Connecticut and had three children together. Husband worked in finance and formed two LLCs that raised capital for investment managers. Wife did not work outside the home with regularity and assumed most childcare responsibilities.
In 2016 Husband sought to relocate the family and his business to Puerto Rico to take advantage of its tax laws. Wife opposed the idea based on her and the children’s ties to Connecticut, but agreed to move on a trial basis so long as they purchased a home in Connecticut to which they could return, if the move proved unsuccessful. The parties purchased a home in Westport and the family moved to Puerto Rico. In April of 2017 Wife and the children moved back to Connecticut and Wife commenced this dissolution action. A lengthy jurisdictional dispute was resolved in favor of Connecticut assuming jurisdiction over the child support and custody issues.
The matter was scheduled for trial in November of 2018, at which time Husband was represented by counsel. However, when the parties appeared for trial, the court continued the matter and transferred the case to the Regional Family Trial Docket. On May 7, 2019, less than one week before the rescheduled trial, Husband’s counsel moved to withdraw and filed a continuance request and Husband filed an appearance as a self-represented party. The trial court denied the motion for continuance. At trial on May 13, Husband renewed his request for continuance and the trial court denied the motion again. The parties were the only witnesses at trial and neither contested the validity or enforceability of the Prenup.
The trial court issued a memorandum of decision ordering Husband to quitclaim his interest in the marital home and pay alimony of $10,000 per month. Contrary to the Prenup, the trial court ordered that the alimony payments be non-deductible to Husband and non-includable to Wife. Husband filed an appeal.
Husband’s first claim on appeal was that the trial court improperly awarded the marital home to Wife without first awarding him a credit for the separate property he contributed to its purchase. The Appellate Court determined that Husband never raised this claim in the trial court and declined to review it. Husband had, throughout the dissolution proceedings, maintained that the funds he withdrew from a separate trust to pay for the home were a loan that constituted a marital liability. The Appellate Court would not permit Husband to advance one theory in trial and then advance a contrary position on appeal.
Husband’s second claim on appeal was that the trial court improperly contravened the Prenup when it ordered that he may not deduct his alimony payments. Wife argued that the trial court properly severed the alimony tax provision from the Prenup because it is unenforceable under the federal tax code. The Appellate Court found that the order was overly broad to the extent that (1) it precluded Husband from taking such a deduction if his income tax obligations are governed by the laws of a jurisdiction that permits such deductions, and (2) in the event that the federal tax laws are amended to permit such deduction.
Husband’s third claim on appeal was that the trial court abused its discretion and denied him due process of law by arbitrarily denying his motion for a continuance to secure new counsel. The Appellate Court first determined that, as Husband did not assert a constitutional claim before the trial court and did not pursue a review under State v. Golding, 213 Conn. 233 (1989) that he could not make a constitutional argument on appeal and the claim would be reviewed only for abuse of discretion. The factors for a trial court to consider include the timeliness of the request for continuance, the likely length of delay, the age and complexity of the case, the granting of prior continuances, the impact of the delay, the legitimacy of the reasons for the request, and the party’s personal responsibility for the timing of the request. If there is error, it must also be reviewed for harmfulness.
Over the course of the dissolution, two attorneys had sought to withdraw from representing Husband due to breakdown in the attorney-client relationship. Husband had sought an additional three-month delay. The action had been filed more than two years earlier and the parties had been ready to proceed to trial six months earlier when the matter was postponed by the court. Wife argued that she would be prejudiced by delay because of an outstanding alimony arrearage and unresolved pendente lite motions. Husband was able to secure new counsel who filed a post-trial brief on his behalf. The Appellate Court concluded, in light of those facts, that the trial court did not abuse its discretion. It did not reach a harmful error analysis officially, but in a footnote essentially reasoned that Husband also failed to demonstrate any harm.
The Judgment was reversed only as to the order regarding the tax consequences of alimony payments and remanded for further proceedings consistent with this opinion and affirmed in all other respects.