Opinion
FSTFA054003156S
06-16-2016
Phyllis Weihs v. Christopher Weihs
UNPUBLISHED OPINION
POST JUDGMENT MEMORANDUM OF DECISION RE PLAINTIFF'S MOTIONS FOR CONTEMPT AND ORDERS (#119.01) AND FOR MODIFICATION OF ALIMONY (#124.01) AND DEFENDANT'S OBJECTION (#127.00)
Thomas D. Colin, J.
Introduction
The parties appeared with their counsel for an evidentiary hearing on June 9 and 10, 2016. The court heard the motions captioned above. Both parties testified, as did the plaintiff's fiancé . Each party was very well represented by experienced, effective and competent counsel, who conducted this hearing in an exemplary fashion. The court has considered the evidence, judicially noticed court file, arguments of counsel and all relevant law. As a result, the following factual findings are made.
Background
The marriage of the parties was dissolved by the court (Tierney, J.) approximately eleven years ago on June 23, 2005, when the court approved, and incorporated by reference into its decree, a separation agreement signed by the parties. At that time, the parties had been married for over fourteen years and their two children were ages ten and twelve. The agreement states that the parties were assisted by an impartial mediator and each party consulted with independent counsel.
At the time of the divorce in 2005, the plaintiff was a homemaker and not otherwise employed. The defendant was employed by Swiss Re Asset Management (Americas) Inc. and disclosed on his financial affidavit a biweekly gross income of $11,674.22 and a total net biweekly income of $7,672. This translates to a gross annual income, at that time, according to his June 21, 2005 financial affidavit, of $303,530. The financial affidavit does not disclose on its face the components of the defendant's income, such as salary, bonus, stock awards, etc. However, the separation agreement, in article 2.2, references that the defendant's " current gross base salary" was then $302,000. As a result, the court concludes that the income section of the financial affidavit submitted by the defendant at the time of the divorce disclosed his base salary only.
Separation Agreement
The alimony and child support provisions of the separation agreement are contained in article II. Article 2.1 provides that the defendant " shall pay to the Wife the sum of [$170,000 per annum], payable monthly at the rate of [$14,167 per month], as and for the base amount of unallocated alimony and child support. This sum shall be paid until the first to occur of the following events: the death of the Husband, the death of the Wife, the remarriage of the Wife, cohabitation by the Wife pursuant to CGS sec. 46b-86 or Ten (10) years from June 1, 2005."
Article 2.2 provides that the amount set forth above in article 2.1 " is based upon the Husband's current gross base salary of [$302,000] and represents 60% of his after tax net income as calculated by FinPlan. In the event the Husband's base salary increases, the Wife shall be entitled to receive an additional sum of unallocated alimony and support in the amount of sixty (60%) percent of the gross amount of his raise. The Husband shall periodically, but no less than once per year, notify the Wife of his gross base salary by providing the Wife a copy of his most recent W-2 and her periodic alimony shall be adjusted accordingly."
Article 2.3 is the provision that has generated the present dispute. It provides in full as follows: " The Husband shall pay to the Wife additional unallocated alimony and child support in the amount of thirty (30%) percent of the Husband's gross bonus from employment . This sum shall be paid annually commencing with the bonus payment received in 2006, within two (2) weeks of the Husband's receipt of said bonus." (Emphasis added).
Article 2.4 provides that " [a]n increase in the Wife's income shall not constitute a substantial change in circumstances sufficient to allow the Husband to seek a downward modification of his support obligation unless and until the Wife's gross income exceeds [$50,000 per year]. The Wife shall annually provide the Husband a copy of her most recent W2 or 1099 showing her earnings."
Article 13.6 provides, in relevant part, that " any Court of competent jurisdiction will have the authority to interpret any of the terms of this Agreement and provide solutions for any difficulties which may arise in order to effectuate the spirit of the Agreement, including, but not limited to, provisions regarding custody, visitation, support or property settlements."
Article 13.7 provides: " In the event of any default in the performance of any one or more of the covenants and agreements to be performed by the Husband or Wife under the terms of this Agreement, she or he shall be entitled to recover from the defaulting party any expense, losses and damages she or he may sustain by reason thereof, including reasonable attorneys fees and Court costs."
Plaintiff's Motion for Contempt and Orders (#119.01)
The plaintiff's motion for contempt and orders dated September 17, 2014 alleges that the defendant failed to (1) supply the plaintiff with copies of all W-2 forms required by the agreement; (2) supply the plaintiff with documentation concerning all of the Defendant's bonus payments so that the Plaintiff can verify and calculate any additional unallocated alimony and child support per the judgment; (3) pay the full amount of unallocated alimony and child support per the terms of the judgment. This motion was served with an order to show cause on the defendant, in-hand, by a state marshal on October 11, 2014.
In order to succeed on her motion for contempt, the plaintiff must prove by clear and convincing evidence that the defendant willfully and intentionally violated a clear and unambiguous court order. Brody v. Brody, 315 Conn. 300, 316, 105 A.3d 887 (2015). While the evidence establishes that the defendant failed to provide to the plaintiff the documentation regarding his income that is required under the terms of the parties' agreement, the court does not find that the defendant's behavior rises to the level of willful contempt. In this case, each party, to some degree, failed to adhere to the strict terms of their agreement; the plaintiff likewise did not comply with the W-2 reporting requirement. The court finds that the defendant's failure to provide the required documentation was an oversight.
Moreover, the parties have a good faith dispute as to whether the plaintiff is entitled to share in the defendant's receipt of certain income that he received from his employer over and above his base salary. " A good faith dispute or legitimate misunderstanding of the terms of an alimony or support obligation may prevent a finding that the payor's nonpayment was wilful." Eldridge v. Eldridge, 244 Conn. 523, 529, 710 A.2d 757 (1998). As a result, no contempt finding shall enter. However, the court still must resolve the underlying issue of whether the plaintiff is entitled to share in certain income received by the defendant. Culver v. Culver, 127 Conn.App. 236, 243, 17 A.3d 1048 (trial court has broad discretion, even in the absence of a contempt finding, to make party whole when that party has suffered as a result of other party's failure to comply with court order), cert. denied, 301 Conn. 929, 23 A.3d 724 (2011).
This dispute involves the interpretation of article 2.3 of the separation agreement. Specifically, it involves the meaning of " the Husband's gross bonus from employment." Under this article, the plaintiff is entitled to receive 30% of the Husband's gross bonus from employment. The term is not specifically defined in this article or elsewhere in the agreement. Neither party claims that this provision of the agreement is ambiguous or unclear. For that reason, neither party made any serious, concerted effort to seek to introduce extrinsic evidence of the parties' intent, at the time that they signed the agreement in 2005, for the purpose of contradicting or varying the language of the contract. Moreover, article 16.2 of the parties' agreement provides as follows: " The Husband and Wife have incorporated in this Agreement their entire understanding and no oral statement or prior written matter extrinsic to this Agreement shall have any force or effect and the said parties are not relying upon any representations or warranties other than those expressly set forth herein. This Agreement supersedes any and all prior agreements between the Husband and Wife."
A separation agreement that is incorporated by reference into a dissolution judgment must be construed in accordance with general contract principles. The court must determine the parties' intent from the language used interpreted in light of the parties' situation and surrounding circumstances. The parties' intent is ascertained from a fair and reasonable construction of the written language of the agreement, which must be accorded its common, natural and ordinary meaning. Parisi v. Parisi, 315 Conn. 370, 383, 107 A.3d 920 (2015).
As noted previously, the parties agree that the language of their agreement is clear and unambiguous. The parties' present disagreement of how article 2.3 is to be interpreted does not compel a conclusion that the agreement is ambiguous. Any ambiguity in a contract must emanate from the language used rather than from a party's subjective perception of the terms. Isham v. Isham, 292 Conn. 170, 181-82, 972 A.2d 228 (2009).
When a contract does not define a particular term, the court may " look to common usage and dictionaries for its definition" Taylor v. Taylor, 57 Conn.App. 528, 533, 752 A.2d 1113 (2000). However, when parties have entered into a written contract, the interpretation of a contract term concerns the meaning of that term as it is used by the parties in their particular agreement and not " on any classic definition of the word or on its definition in cases that do not involve a written agreement of the parties." Id., 533-34.
In this case, the defendant was previously employed by Swiss Re. He received a regular base salary and an annual cash bonus. The plaintiff was paid her appropriate share of each. The defendant also received additional funds from his employer after the divorce. This included awards under various benefit plans, which include the Value Assignment Incentive (VAI), the Long Term Incentive Plan (LTI) and the Leadership Performance Plan (LPP). The defendant paid the plaintiff her percentage of the VAI funds but paid nothing to the plaintiff from the LTI or LPP awards. The question presented to this court is whether the LTI and LPP benefits are part of " the Husband's gross bonus from employment" within the meaning of article 2.3. In reaching its conclusion in this case, this court finds persuasive the reasoning set forth in Ayres v. Ayres, Superior Court, judicial district of Litchfield, Docket No. FA-10-4009555-S, (May 15, 2015).
In Ayres, the court was faced with the similar question of whether the husband's short term incentive payment (STI) from his employer fell within the definition of " performance based bonus" under the parties' settlement agreement. The court there referenced the dictionary definition of bonus as " something in addition to what is expected or strictly due, as a. money or an equivalent given in addition to an employee's usual compensation; b. a premium . . . given by a corporation to . . . an employee." Id. (Citing Merriam-Webster's Collegiate Dictionary (11th Ed. 2003)). The court also cited this definition from Black's Law Dictionary (9th Ed. 2009) " [a] premium paid in addition to what is due or expected."
The court in Ayres further referenced the dictionary definition of premium as " a sum over and above a regular price to be paid chiefly as an inducement or incentive." Merriam-Webster's Collegiate Dictionary (11th Ed. 2003). Moreover, the court noted that, in Silver v. Silver, 170 Conn. 305, 309, 365 A.2d 1188 (1976), the Connecticut Supreme Court defined " bonus" to mean " something given or received that is over and above what is expected." As a result, the court concluded that the husband's STI payments fell within the general definition of " bonus" set forth in the parties' agreement.
While the dictionary definition is certainly not completely dispositive of the issue in this case, neither is the fact that the employer-generated compensation records fail to precisely define or specifically describe the LTI and LPP benefits as a " bonus." Taylor v. Taylor, supra, 57 Conn.App. 534 (" [e]xtrinsic evidence that a third party, such as the defendant's employer, would define [a term] differently is irrelevant when the words of the agreement plainly indicate otherwise.").
In this case, the defendant's 2005 signed and sworn financial affidavit, as previously noted, disclosed in the income section his base salary only; there is no disclosure of, or reference to, any other compensation from his employer. As a result, the court infers that he was guaranteed no other income from his employer; there was no evidence introduced to show that the defendant was, at that time, fraudulently concealing anything from the plaintiff or the court. However, the separation agreement clearly contemplated the possibility that the defendant would have earnings in addition to his base salary and, therefore, the parties, in their agreement, differentiated between the defendant's " gross base salary" as set forth in article 2.1 and the defendant's " gross bonus from employment" in article 2.3. This makes clear that the parties intended that the plaintiff share in more than the defendant's salary. The defendant's post-judgment LTI and LPP benefit awards certainly constitute " something given or received that is over and above what is expected." Silver v. Silver, supra, 170 Conn. 309. If it was expected by the defendant in 2005, then he would have included it on his financial affidavit. As a result, those unexpected compensation-related awards fall within the contract definition of " bonus."
This conclusion of the parties' intent is further evidenced by the defendant's payment to the plaintiff of funds earned by him through the Value Alignment Incentive plan (VAI). Like the LTI and LPP, the VAI came into existence after the date of the divorce. Nevertheless, the defendant included this income under the terms of article 2.3 and paid the defendant her 30% share. The defendant's financial affidavit dated July 10, 2015 states that " the defendant received a VAI payment of $126,105 in May of 2005 and thereafter paid the Plaintiff her share pursuant to the Separation Agreement ." (Emphasis added). The defendant offered various reasons to support his position that he was justified in treating the VAI differently from the LTI and LPP. For example, he said that he and his employer considered VAI to be part of his " bonus" while the LTI and LPP were something else entirely. These arguments are unconvincing. To the contrary, the court infers from the defendant's payment of funds derived from the VAI that the parties intended that he should also pay out on awards in the nature of the LTI and LPP.
While the employer generated compensation documents are not dispositive of the issue presently before the court, they do seem to illustrate that the purpose of the various plans (VAI, LTI, LPP) are similar in nature; namely, to provide compensation to their employees in a form over and above base salary. This is clearly in the nature of a bonus even if it is not specifically described in that fashion. For example, the VAI has been described by the employer as follows: " [i]n addition to the annual incentive bonus paid in cash, you are eligible to receive a payment after 3 years which is aligned with the longer term nature of our industry." The LTI is described as follows: " The Plan provides an increased incentive to senior management to make significant contributions to shareholder value and to ensure that Swiss Re attracts and retains individuals with exceptional skills. The LTI is a discretionary grant for a select group of key executives."
Had the parties wanted to exclude certain types of awards from the definition of bonus, they could have done so; they did not. The agreement does not specifically reference cash bonuses. It does not specifically reference stock bonuses. It does not exclude anything. The agreement does not reference by precise name any particular type of compensation or specific benefits earned by the defendant from his employer. The defendant, who was an investment portfolio manager at the time of the divorce, could have insisted on such a limitation when the agreement was drafted; however, no such limitation was included in article 2.3. The parties did, however, use more specific language in other parts of their agreement when describing particular employment related items, such as in article 6.2(B), regarding the defendant's Swiss Re options/shares account. The parties' failure to similarly delineate the items that may or may not be included within the meaning of the word " bonus" in article 2.3 is further evidence of their intention that the word " bonus" is to be read broadly to capture all employment compensation received by the defendant over and above the only income described on his financial affidavit at that time; specifically, his regularly expected base salary, which was covered separately by article 2.1. Silver v. Silver, supra, 170 Conn. 309.
As a result, it is not unreasonable to conclude that the parties intended to use the dictionary definition of " bonus" as described by the Connecticut Supreme Court in Silver, and the court now makes that determination. Furthermore, in paragraph 13.6, the parties agreed " that in the event they are unsuccessful in resolving any dispute, any Court of competent jurisdiction will have the authority to interpret any of the terms of this Agreement and provide solutions for any difficulties which may arise in order to effectuate the spirit of the Agreement, including, but not limited to, provisions regarding . . . support . . ." The court's ruling today provides a solution that is necessary to effectuate the spirit of the parties' agreement, as that spirit is expressly set forth in the language of the contract.
The plaintiff is now entitled to her 30% share of the defendant's LTI and LPP benefit awards as follows:
Year
Amount Received
Amount Owed to Plaintiff
2012
$751,862.61
$225,558.78
2013
$446,315.22
$133,894.57
2014
$539,397.35
$161,819.21
2015
$387,751.30
$116,325.39
Total
$2,125,326.48
$637,597.95
ORDERS
The plaintiff's motion is granted in part and denied in part in accordance with the following order. No contempt finding is made. The defendant shall pay to the plaintiff, on or before August 1, 2016, the sum of $637,597.95 as unallocated alimony and child support in accordance with article 2.3 of the separation agreement, together with simple interest, pursuant to section 37-3a of the Connecticut General Statutes, at the rate of three percent (3%) from the dates that the defendant received these bonus awards, through the date that the plaintiff is paid in full. Rostad v. Hirsch, 148 Conn.App. 441, 448, 85 A.3d 1212 (2014) (statutory interest may be awarded even if liable party had good faith basis for retention of funds due to other party; purpose of statutory interest is to compensate parties who have been deprived of the use of their money), appeal dismissed, 317 Conn. 290, 116 A.3d 307 (2015). In the event that there is a dispute between the parties as to the precise dollar amount of the interest owed by the defendant to the plaintiff, then the court shall hear and resolve the dispute upon motion by either party.
Each party shall pay their own counsel fees. Each party has the financial ability to pay their own counsel fees. Neither party has engaged in litigation misconduct. No contempt finding has been made against the defendant. The parties had a good faith dispute about the language of their agreement and the court finds that requiring each party to pay their own counsel fees will not undermine the court's financial orders.
Plaintiff's Motion for Modification of Alimony (#124.01) and Defendant's Objection (#127.00)
Shortly before the expiration of the alimony term, the plaintiff filed a motion for modification of alimony. The plaintiff alleges the following grounds in support of her motion for modification of the term and amount of alimony: (1) termination of her periodic support would work a financial hardship on her; (2) her periodic support should not be terminated after consideration of various statutory alimony factors; (3) termination of her support will deprive her of the ability to provide herself with the economic means to meet her needs, necessities and standard of living or station in life, as they existed at the time of the divorce and that were established during the parties' marriage; (4) absent the continued receipt of alimony, her reasonable needs cannot be met.
The defendant filed an objection on April 8, 2015. In his objection, the defendant claims that the plaintiff's basis for seeking an alimony modification is speculative. The defendant also filed a motion to dismiss the plaintiff's alimony modification motion and claimed that the court lacked subject matter jurisdiction because the issues raised by the plaintiff in her motion were not justiciable and were unripe and/or moot. The motion to dismiss was denied by this court on March 7, 2016 (#143.01).
Pursuant to section 46b-86(a) of the Connecticut General Statutes, alimony may be modified " upon a showing of substantial change in the circumstances of either party." The order may be continued, set aside, altered or modified. This also includes the suspension of payments. Grosso v. Grosso, 59 Conn.App. 628, 758 A.2d 367, cert. denied, 254 Conn. 938, 761 A.2d 761 (2000). An order for time-limited alimony has been construed as modifiable, as to both amount and duration, should circumstances change during the specified time period. Scoville v. Scoville, 179 Conn. 277, 280, 426 A.2d 271 (1979).
Since the parties' divorce more than ten years ago, the plaintiff, who is now age 51, has achieved a graduate degree, obtained a license as a professional counselor and is working full-time at Fairfield University as a clinical mental health counselor. She has started her own part-time private practice, although that practice has been negatively impacted by her cancer diagnosis. Fortunately, the plaintiff has received treatment and is now doing well. Her current net monthly income is $4,381. In addition, since the divorce, both children have emancipated and no longer reside at home. The parties' son is now age 23 and pursuing a master's degree at the University of Cambridge. The parties' daughter is age 21 and attends Colgate.
In the summer of 2013, approximately three years ago, the plaintiff's fiance moved into her home. A wedding that was previously planned to take place shortly after the expiration of the alimony term in 2015 was postponed. No new date has been set. The fiance is a full-time college professor. He provides no financial support to the plaintiff and contributes nothing significant to the household expenses, such as mortgage, taxes, insurance or utilities, even though he resides in her home on a full-time basis.
Although the plaintiff claims to be in a dire financial condition, it is clear that she and her fiance have arranged their financial situation for the last three years in order to avoid being subjected to a cohabitation modification claim by the defendant. If the plaintiff was really in such a dire financial situation, she would have undoubtedly sought financial assistance from her live-in fiance who is employed on a full-time basis; instead, for strategic and tactical reasons, she has not sought such assistance. This leads the court to infer that her financial situation is nowhere near the condition she claims. Her current financial affidavit shows that she has total assets that are worth $1,924,632 and total debts of $73,348 (not including mortgage debt).
The defendant, now age 53, lost his job at Swiss Re after 18 years when his position was eliminated in 2015. He has not yet found employment. He holds an undergraduate degree in mathematical economics from Colgate University and a master's degree in finance from the New York University Stern School of Business. He did not seek any modification of his support obligations upon the attainment of the age of majority of each child and, under the terms of the separation agreement, the defendant was solely responsible for the children's college tuition, room and board. All other educational costs were to be equally divided between the parties. However, the defendant did not strictly enforce this provision in the agreement and has not sought reimbursement from the plaintiff for her share of certain education related expenses.
The defendant did not seek to modify his alimony and child support obligation after the plaintiff's fiancé began to reside with her in 2013. He did not seek to modify his obligation after the plaintiff exceeded the safe harbor income threshold set forth in the parties' agreement.
The defendant's current financial affidavit shows that he has total assets that are worth $6,612,174 and total debts of $10,357 (not including mortgage debt).
The plaintiff has failed to prove the allegations set forth in her motion by a preponderance of the evidence. The substantial changes in circumstances that she alleges in her motion were not established by the credible evidence. Clearly, as previously noted, other circumstances have changed substantially since the parties divorced. The plaintiff is now employed while the defendant is not. The children are grown. The plaintiff is engaged and resides with her fiancé . The defendant has remarried. None of these changes warrant an extension of the alimony term or a change in the alimony amount.
ORDERS
The plaintiff's motion for modification is denied. The defendant's objection (based on speculation) is overruled.
The financial affidavits of the parties shall be unsealed.