Opinion
FA930305406S
11-25-2015
Peggy J. Daily v. Jack L. Daily
UNPUBLISHED OPINION
MEMORANDUM OF DECISION
Mary E. Sommer, J.
INTEREST
The plaintiff is seeking an order that defendant pay interest on the $125, 000.00 alimony arrearage which the defendant was ordered to pay pursuant to the parties' May 7, 2008 agreement. It is well established that the award of interest on arrearage is an equitable determination. Ford v. Ford (II), 41 Conn.Supp. 538, 589 A.2d 893 (1990). Interest can be awarded if retention of money is wrongful. DeMatteo v. DeMatteo, 21 Conn.App. 582, 575 A.2d 243, cert. denied, 216 Conn. 802, 577 A.2d 715 (1990). Our appellate courts have recently confirmed that, " Interest can be awarded if money is wrongfully retained, even without a finding of bad faith or unreasonable conduct." Sosin v. Sosin (III), 109 Conn.App. 691, 952 A.2d 1258 (2008).
It is axiomatic that a trial court considering a domestic relations case acts as a court of equity that is empowered to fashion appropriate relief under its broad equitable powers. Febbroriello v. Febbroriello, 21 Conn.App. 200, 208, 572 A.2d 1032 (1990); LaBow v. LaBow, supra, at 351; see also Darak v. Darak, 210 Conn. 462, 478, 556 A.2d 145 (1989). " There is no statutory prohibition against awarding interest on a judgment in domestic relations cases. LaBow v. LaBow [supra, at 353]." Kronholm v. Kronholm, 16 Conn.App. 124, 133, 547 A.2d 61 (1988). The absence of reference to interest in a separation agreement also does not undermine the authority of the court to make an award of interest. See Niles v. Niles, 15 Conn.App. 718, 721, 546 A.2d 329 (1988); LaBow v. LaBow, supra .
The question of whether interest is a proper element of recovery ordinarily rests upon whether the detention of money is wrongful. Cecio Bros., Inc. v. Feldmann, 161 Conn. 265, 275, 287 A.2d 374 (1971). Where the facts establish that a party has been unjustifiably denied the use of his or her money, the court is within its equitable power to award interest accordingly. Cf. LaBow v. LaBow, supra (award of interest appropriate " [b]ecause there is no statutory prohibition against award interest on a judgment in domestic relations cases, and because the courts may fashion remedies that are appropriate and equitable, and because the court found that the retention of the sums owed was wrongful"). DeMatteo v. DeMatteo, 21 Conn.App. 582, 575 A.2d 243 (1990).
Section 37-3a provides in pertinent part that " interest at the rate of ten percent a year, and no more, may be recovered and allowed in civil actions . . . as damages for the detention of money after it becomes payable . . ."
The Connecticut courts have long recognized that, " the determination of whether interest is a proper element of damages is to be made in view of the demands of justice, not through the application of any arbitrary rules . . . and . . . the allowance of interest is primarily an equitable determination to be made within the discretion of the trial court." H.B. Toms Tree Surgery, Inc. v. Brant, 187 Conn. 343, 348, 446 A.2d 1 (1982), quoting Scribner v. O'Brien, Inc., 169 Conn. 389, 405-06, 363 A.2d 160 (1975). Where the detention of sums due and payable is adjudged to be wrongful, the courts have concluded that interest is a proper element of recovery. See Marcus v. Marcus, 175 Conn. 138, 146, 394 A.2d 727 (1978); Cecio Bros., Inc. v. Feldmann, 161 Conn. 265, 274-75, 287 A.2d 374 (1971); LaBow v. LaBow, 13 Conn.App. 330, 352-53, 537 A.2d 157, cert. denied, 207 Conn. 806, 540 A.2d 374 (1988). Interest awarded under the provisions of § 37-3a is intended to compensate a party for the wrongful detention of sums rightfully owed them. See Marcus v. Marcus, supra ; LaBow v. LaBow supra, Ford v. Ford, 41 Conn.Supp. 538, 589 A.2d 893 (1990).
As more fully described below, there is ample evidence from the record in this case that the defendant has wrongfully withheld payment of the $125, 000.00 arrearage owed to the plaintiff and took other actions arguably jeopardizing the plaintiff's ability to recover at all. Moreover, there was no evidence that the defendant lacked funds to make the payment in 2008. In fact, the evidence is overwhelmingly clear that he had ample funds to satisfy the arrearage but acted affirmatively to frustrate the court orders and the agreement which he had made. Having found that the defendant had transferred over $660, 000.00 to his second wife and son, Judge Klatt concluded, " It is clear that the defendant has been reducing his income." (Klatt, J. 10/6/2011). This finding was confirmed by Judge Owens, on February 27, 2009, Mr. Daily transferred $200, 000.00 to his present wife. On May 10, 2010, his bank balance was $369, 445.99." To defendant's claim that he lacks liquid assets, the court notes that in Fitzgerald v. Fitzgerald, 190 Conn. 26, 33-34, 459 A.2d 498 (1983), the court made clear that " ample liquid funds" were not an absolute litmus test for an award of counsel fees. The court pointed out both in Fitzgerald and more recently in Eslami v. Eslami, 218 Conn. 801, 820, 591 A.2d 411 (1991), that to award counsel fees to a spouse who had sufficient liquid assets would be justified, if the failure to do so would substantially undermine the other financial awards. Furthermore, it is contrary to fundamental principles of justice for a party, having had sufficient funds to pay the arrearage at the time of the order, to then avoid payment by deliberately reducing his liquid assets as the defendant did in this case.
On December 17, 2013, the defendant executed a Quit Claim Deed for $10.00 granting transferring all right, title and ownership of the property upon which the lien was placed to Jack L. Daily and Mary Ann Carcha-Daily as Joint Tenants with Rights of Survivorship. Plaintiff argues that this transfer is a sale which then obligates defendant to pay the amount of the lien.
Defendant argues that he was not obliged to pay the $125, 000.00 until the house was sold. This claim refers to a statement by his then counsel at the conclusion of April 2008 proceedings. This purely gratuitous statement has no application to the facts of the case.
Both sides are mistaken in their arguments. Judge Owens stated in his decision dated August 16, 2013, " It was never mandated that the plaintiff was required to wait until the house was actually sold to receive her arrearage or that she might never receive the sums that were owed to her." As found by Judge Owens and confirmed by the record that the reference to pay payment of $125, 000.00 upon the sale of the house is not in the agreement nor is it a term of the court order. Therefore, although subsequent pleadings refer to the issue of whether the execution of the quitclaim deed is a sale and thus, an event requiring defendant to pay the remaining $125, 000.00 arrearage, it is not necessary to the court's determination of the plaintiffs' claim for interest and attorneys fees. The defendant owed this money to the plaintiff well prior to 2008 and the lien served only as a vehicle intended to secure payment. Based on previous factual findings and the orders of Judges Owens and Klatt, in addition to the December 5, 2014 decision and February 23, 2015 order of this court, the defendant had the financial resources to pay the $125, 000.00 arrearage, but chose not to do so. At no time has he offered any credible excuse for his failure to pay the plaintiff monies due for any alimony arrearage which accrued decades ago.
Applying fundamental considerations of equity and fairness, the plaintiff should not have been deprived of payment of the remaining $125, 000.00 alimony arrearage since 2008, nor should she have been forced to incur legal fees to obtain monies which the court had previously found her entitled.
It is a matter of record in this case that the defendant has deliberately refused to pay alimony as required both in pendent lite orders and pursuant to the 1993 judgment of dissolution while also transferring large sums of money to his wife and son. The actual amount of past due alimony as of April 23, 2008 exceeded $200, 000.00. The parties agreed whereby the arrearage debt would be satisfied by payment of $50, 000.00 and $125, 000.00 would be secured by a lien on the Roseville Road property. This amount was long past due.
The absence of a specific payment date does not prevent the court from awarding interest where the retention of funds is found to be wrongful. In such circumstances, the court may in the exercise of its discretion determine a reasonable period of time for payment of the arrearage. The facts of this case support the finding that the defendant deliberately and wrongfully retained money rightfully payable to the plaintiff, that he has done so for over seven following the May 2008 orders for payment of the alimony arrearage. Defendant has wrongfully retained money rightfully due to the plaintiff for an unreasonable period of time. During this entire time he has not made a single payment toward the arrearage and has required her to incur further counsel fees to enforce her right to payment of the arrearage.
Plaintiff is seeking an order of interest at the statutory rate from May 7, 2008 to date, a period of approximately seven and a half years. Interest at the statutory rate of 10% calculates to $12, 500 annually or $1, 041.67 monthly.
Based on the foregoing, the court finds that a reasonable period for payment of the $125, 000.00 would have been over a period of three years from May 2008. At a minimum, plaintiff is entitled to interest at the statutory rate from the date of Judge Owens's decision on August 16, 2013 which established that the plaintiff's right to payment was never intended to depend on the sale of the property. Interest calculated thereby from August 16, 2013 through December 16, 2015 is $29, 166.68. Interest shall accrue, if not paid in full at the legal rate as calculated above.
ATTORNEYS FEES
Plaintiff also seeks an award of attorneys fees for the cost of prosecuting these motions. The record reflects that over the years the plaintiff has been forced to incur well over a hundred thousand dollars in legal fees to enforce court orders against the defendant. Connecticut General Statutes § 46b-62 gives the court jurisdiction to order attorneys fees in certain actions, including post judgment matters. It has been apparent throughout the entire time of proceedings, including extensive post-judgment filings that the defendant had assets to pay attorneys fees while the plaintiff did not.
Based on the extensive record in this case, the court finds that the award of attorneys fees is necessary to avoid undermining of other financial orders, in particular payment of the remaining $125, 000.00 alimony arrearage. Based on its review of the record and the information provided in support of the plaintiff's claim for attorneys fees, the court hereby orders the defendant to pay attorneys fees in the amount of $18, 000.00.
ORDERS
The defendant is ordered to pay the following amounts by December 16, 2015:
$125, 000.00 Alimony;
$29, 166.68 Interest;
$18, 000.00 Attorneys Fees.