Opinion
NNHFA920328366
10-30-2017
Lorraine M. Zandri v. Geno J. Zandri
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE DEFENDANT'S MOTION FOR MODIFICATION OF ALIMONY, ##110, 111)
Corinne L. Klatt, J.
Defendant filed this Motion for Modification of Alimony (#110, 111) in October 2016. Defendant claims the significant change in circumstance as a reduction in income as he is now retired and 71 years of age.
The marriage of the parties was dissolved on June 10, 1992. The separation agreement was incorporated into the judgment. Commendably, this is the first series of motions filed postjudgment even though strict adherence to the terms of the separation agreement was not always met.
At the time of the dissolution, defendant was earning a gross sum of $1,500 per week; the plaintiff was unemployed. Defendant was employed by Northeast Utilities (now Eversource) until his retirement on February 1, 2000. Plaintiff, at the time of the dissolution, was unemployed. Before the date of the dissolution, plaintiff had been employed by Zandri's Stillwood Inn as a bookkeeper with a minimal salary. She lost that employment as a result of the divorce. She has not been employed since.
Pursuant to Article 6(B) of the separation agreement, plaintiff received a lifetime award of alimony. Defendant was ordered to pay plaintiff a minimum of $400 per week or 50% of their combined weekly net income minus plaintiff's net income whichever was higher. One-half of that award was deemed to be alimony; the other half was a property distribution. The agreement clearly stated that the intent of the parties was to equalize their net incomes. In exchange for this award, the plaintiff relinquished any ownership claim as to defendant's family business, Zandri's Stillwood Inn. Pursuant to section (C), the property division portion of the award was non-modifiable as to term or amount.
Testimony established that defendant retired under a special benefit program offered by Northeast Utilities that allowed him to take a lump sum benefit and a monthly annuity pension benefit. Defendant received a monthly pension benefit of $2,436 until March 1, 2007 at which time the benefit was reduced to $1,274. He also received a lump sum payment of $168,594. He designated his current wife as the beneficiary of these benefits. Defendant apparently " rolled over" a significant portion of the lump sum payment into another retirement account. This account was not listed on either his December 2016 or October 2017 financial affidavits. Plaintiff did not receive any monies or benefits as a result of defendant's actions; in fact, she was not aware of the transactions until the present motions were filed.
Defendant argues that the agreement presumed that plaintiff would be employed and that as a result of her not seeking employment, defendant has paid more in alimony over the course of the past twenty-five years. Even if true, this speculative argument would not satisfy defendant's burden to show a significant change in his financial circumstances in the present motion. Plaintiff is now 71 years of age, in poor health and is not capable of employment any longer.
Defendant further argues that the pension benefits and social security benefits he receives monthly should not be counted as income, arguing that they are part of the property distribution of the dissolution action. Defendant receives $408 weekly from Social Security and $306 weekly from his pension plan. Defendant's claim is based on Article 5 of the separation agreement that stated the following: " Each party shall retain any retirement and/or pensions presently in their name. Husband shall name the Wife as irrevocable beneficiary under his 401k and TRASOP Plans unless or until she predeceases him." Defendant's argument fails however as it ignores the Article 6(D) of the agreement that indicates " all draws from the pension or retirement accounts shall be considered income" and included in the alimony and support calculation.
Defendant claims that he has had a reduction in income overall. He receives income from several sources: pension benefits, social security benefit, income from part-time employment, guaranteed payments from his interest in Zandri's Stillwood Inn and interest from a loan to the same company. The October financial affidavit filed by the defendant states a gross income of $1,204, net income of $1,137, but does not include the guaranteed payments or loan interest. The defendant acknowledged that his December 2016 financial affidavit (plaintiff's #4) with a gross income of $1,677 and net of $1,339, is accurate when the guaranteed payments and loan interest are included.
Defendant owns a 25% interest in the family business known as Zandri's Stillwood Inn. He has gifted ownership of 20% of his interest to his children, while maintaining a lifetime claim to the income and profits from that percentage. Clearly in an effort to reduce the amount of income appearing on his financial affidavit, the defendant, during the pendency of this motion, gifted 1% of his remaining interest to his present wife and caused all the guaranteed payments to be issued in her name. This 1% interest has now been gifted back to the defendant. Defendant further testified there is pending litigation over these payments as his son has had the guaranteed payments made payable to him not the defendant. As the defendant maintains his claim to the income and profits, including any guaranteed payments, the court considers these monies as income to the defendant.
" Section 46b-86 of the Connecticut General Statutes governs the modification or termination of an alimony or support order after the date of a dissolution judgment." (Internal quotation marks omitted.) Olson v. Mohammadu, 169 Conn.App. 243, 252, 149 A.3d 198, cert. denied, 324 Conn. 903, 151 A.3d 1289 (2016). " When, as in this case, the disputed issue is alimony . . . the applicable provision of the statute is § 46b-86(a), which provides that a final order . . . may be modified by the trial court upon a showing of a substantial change in the circumstances of either party . . ." (Internal quotation marks omitted.) Id. " Under that statutory provision, the party seeking the modification bears the burden of demonstrating that such a change has occurred . . ." Id., 252-53. " To obtain a modification, the moving party must demonstrate that circumstances have changed since the last court order such that it would be unjust or inequitable to hold either party to it." (Emphasis omitted.) Id., 253.
In consideration of a motion to modify, the court must also consider whether the moving party appears before the court with " clean hands." In Emigrant Mortgage Co. v. D'Agostino, 94 Conn.App. 793, 804, 896 A.2d 814 (2006), the court explained this principle: " Our jurisprudence has recognized that those seeking equitable redress in our courts must come with clean hands. The doctrine of unclean hands expresses the principle that where a plaintiff seeks equitable relief, he must show that his conduct has been fair, equitable and honest as to the particular controversy in issue . . . For a complainant to show that he is entitled to the benefit of equity he must establish that he comes into court with clean hands . . . The clean hands doctrine is applied not for the protection of the parties but for the protection of the court. It is applied . . . for the advancement of right and justice . . . The party seeking to invoke the clean hands doctrine to bar equitable relief must show that his opponent engaged in willful misconduct with regard to the matter in litigation." See also: Hill v. Raffone, 103 Conn.App. 737, 930 A.2d 788 (2007), Majewicz v. Majewicz, 2014 WL3397778.
The court finds that the principle of clean hands bars the defendant from the relief he seeks in his Motion for Modification. The defendant has consistently engaged in behavior that was not in compliance with the income provisions of Article 6 of the Separation Agreement. Testimony established that defendant has never paid more than $400 per week, the minimum amount, even when his net income would have required a greater amount. When defendant retired in 2000, he took a lump sum benefit of $168,594 from his pension plan. According to the separation agreement, these monies were income to him and should have been, but were not, included in the calculation towards payment to the plaintiff. In 2012, he convinced the plaintiff to accept a reduced amount of alimony/support of $325 per week even when his income as admitted in his financial affidavits and income tax returns was quite capable of supporting an award in compliance with the separation agreement. The tax returns for the years 2012 through 2015 (Ex. #15-19) reveals he had pension and earned income attributed to him well in excess of $120,000. In 2014, defendant and his wife removed approximately $120,000 from pension annuity plans, $65,715 of which is attributed to the defendant; thereby further reducing the income from one of his pension benefits an average of $20,000 per year. Defendant has endeavored to place much of his now owned assets in his current wife's name with the result that any income produced from these assets are halved, while costs and expenses were counted in their full amounts. As indicated above, defendant attempted to reduce his income by gifting a percentage of his ownership in a family business to his current wife. Defendant has exhibited a pattern of behavior designed to minimize his income in order to reduce his obligation to the plaintiff. His conduct has neither been fair nor honest toward the plaintiff.
The court finds that defendant's claim for relief is barred by the " clean hands" doctrine and his Motion for Modification is therefore denied.
Plaintiff's Motion for Contempt #117
Plaintiff asks this court to hold the defendant in contempt for violating Article 6, Section B of the Separation Agreement by his failure to pay at least the minimum amount of alimony of $400 per week. Plaintiff testified that defendant began paying only $325 per week as of May 4, 2012 through August 21, 2017. Given the above described factual and legal findings, the court finds there was a clear and unambiguous order that was violated, that the defendant has willfully violated that order and finds defendant in contempt. He is ordered to reimburse plaintiff in the amount of $75 per week for the period of time from May 4, 2012 through August 21, 2017. The resulting arrearage is $20,475.
Plaintiff's Motion for Contempt #125
Plaintiff asks this court to hold the defendant in contempt for violating Article 4, Section D of the Separation Agreement that required the defendant to reimburse her for her share of a $29,450 loan made to the Stillwood Inn. The business paid $9,085 to the defendant towards repayment of the loan. The evidence established that while some portion of the original loan was repaid to the defendant, he did not pay any portion to the plaintiff, in violation of the agreement. Defendant is found in contempt and is ordered to reimburse plaintiff in the amount of $4,543.
Plaintiff further claims that defendant deliberately took actions that depleted both the 401k and TRASOP plans, and that those withdrawals should have been included in the income calculations. (Article 4, Section 5.) At the time of the dissolution, defendant listed as assets $67,327 in the 401k and TRASOP accounts. He testified that he depleted both accounts over time. Again the plaintiff did not receive any of these monies as income, nor were the draws included in the income calculation. As the Separation Agreement required that any draw against retirement accounts shall be considered as income, the defendant is in willful contempt of this order. Plaintiff offered no specific evidence in regard to her financial losses under this section; she does not make any financial claim as part of her request for relief. The court cannot speculate as to what income she might have received had defendant left the funds intact. The court imposes no sanction for this contempt.
Plaintiff's Motion for Contempt #128
Plaintiff asks the court to hold defendant in contempt for failure to pay alimony. The testimony established that defendant ceased all payments as of August 21, 2017. Based on the above factual findings, the court finds the defendant in willful contempt of the order in Article 6, Section B requiring the payment of alimony and support. The defendant had ample income with which to pay this award. Any reduction in income is a result of his voluntary actions in a deliberate effort to reduce the showing of income. There was no testimony that he could not meet his expenses, or that there were any changes in lifestyle as a result of his claimed reduction in income. The court finds defendant in willful contempt of this court order and makes a finding of an arrearage to the plaintiff in the amount of $4,000, for the time period of August 21, 2017 through October 24, 2017.
Orders
1) Defendant is ordered to pay to plaintiff the sum of $29,018 as follows:
a) $7,250 by January 30, 2018;
b) $7,250 by April 28, 2018;
c) $7,250 by July 31, 2018
d) $7,268 by October 30, 2018.
2) Defendant is to designate plaintiff as an irrevocable beneficiary on a new or portion of an existing life insurance policy in the amount of $29,000 until his financial obligation under this order is completed. Proof of this policy shall be supplied to plaintiff within 60 days.
3) The court orders the defendant to reimburse the plaintiff for Attorney fees in the amount of $7,500 (Seven thousand five hundred dollars) for the costs of legal representation in these motions within 60 days of this decision.