Fogel v. Fogel, 212 Conn. App. 784 (2022) (post-judgment alimony modification).
Officially released May 31, 2022
In Short: (1) There was sufficient evidence that Husband was involuntarily terminated to uphold the trial court’s finding, even where a “transition agreement” indicated he had “retired,” (2) the trial court did not err by declining to consider “phantom income” where language regarding such income had been removed in a post-judgment modification, and (3) the trial court did not err by failing to enumerate all the statutory criteria of § 46b-82 in its decision.
The parties were divorced in 2009 pursuant a separation agreement. The separation agreement provided that Husband was to pay $16,666.67 per month as unallocated alimony and child support, plus an additional percentage of his gross “income from employment” through the first to occur of the death of either party, remarriage of Wife, or January 31, 2019. The term “income from employment” was defined in detail and specifically excluded “distributions which are solely distributions to provide for income taxes on phantom income …”
In 2017, the separation agreement was modified by post-judgment agreement of the parties, removing the provision that defined “income from employment” and the language pertaining to “phantom income.” The post-judgment agreement provided that Husband would make certain payments as alimony until January 31, 2019, and that such payments were modifiable only if Husband “is involuntarily terminated from his current job …”
In January 2018, Husband filed a motion to modify alimony alleging a substantial change in circumstances in that he had been involuntarily terminated from his job. In February 2018, Wife filed a motion for contempt alleging that Husband unilaterally reduced his alimony payment for that month.
After a three-day evidentiary hearing, the trial court issued a memorandum of decision granting Husband’s motion to modify alimony and denying Wife’s motion for contempt. The trial court found that, although Husband had executed a “Transition Agreement” indicating that he had “retired,” he had actually been terminated involuntarily for making an investment that cost his employer $40m. The trial court further found that Husband had been unable to secure employment at comparable salary.
The trial court concluded that there had been a substantial change in circumstances and that Husband did not have the ability to pay his remaining alimony obligation. The trial court rejected Wife’s argument that Husband had the ability to pay based on receipt of $3.2m in “phantom income” in 2018, finding that it was not available for Husband to use. The trial court terminated Husband’s alimony. The trial court found that Wife failed to demonstrate that Husband willfully failed to pay the alimony order and denied her motion for contempt.
Wife appealed, arguing that the trial court erred in (1) finding that Husband had been involuntarily terminated from employment, (2) declining to consider “phantom income” for purposes of determining Husband’s alimony obligation, and (3) failing to consider all the factors set forth in § 46b-82 in deciding whether to modify Husband’s alimony obligation. The Appellate Court reviewed Wife’s claims under the abuse of discretion and clearly erroneous standards of review.
As to Wife’s first claim, the Appellate Court found that, although the evidence might have supported an alternative finding as to Husband’s termination, that was not the standard of review, and there was sufficient evidence to support the finding that the trial court actually made. Husband and five of his partners and/or directors testified that his termination was not voluntary. In plain English, an appeal is not a re-trial, and abuse of discretion is a high standard for this reason.
With regard to Wife’s second claim, the Appellate Court determined that Wife relied heavily on the original separation agreement, which was modified in 2017 to remove the language on which Wife relied. (The Appellate Court noted in a footnote that phantom income is income generated by an LLC or LP that hasn’t been distributed to the members; it is taxable income without a cash distribution.) The Appellate Court determined that Wife’s reliance on language which was no longer in effect rendered her argument without merit.
As to Wife’s third claim, that the trial court considered only Husband’s net income rather than all the criteria set forth in § 46b-82, the Appellate Court found that the memorandum of decision made specific reference to the statutory factors and discussed many of them, including income, age, health and education of the parties. The trial court was not obligated to recite each statutory factor nor give them equal weight.
The Judgment was affirmed.
