GREAT COUNTRY BANK ET AL.
JEFFREY OGALIN ET AL.
April 11 2016
from Superior Court, judicial district of Fairfield, Kamp,
Moss, for the appellant (Drywall Construction Corporation of
N. Gilmore, with whom, on the brief, was Christopher A.
Klepps, for the appellee (substitute plaintiff).
DiPentima, C. J., and Keller and Prescott, Js.
foreclosure action, a third party, Drywall Construction
Corporation of Connecticut, Inc. (Drywall), appeals from the
judgment of the trial court awarding the plaintiff Cadle
Company a turnover order in the amount of $19, 887.27 to aid
in the execution of a deficiency judgment rendered against
the defendant Frank Ogalin, Jr. Drywall claims that (1) the court
erroneously found that, as of the date on which the plaintiff
served a property execution on Drywall, it owed the defendant
unreimbursed business expenses, and (2) even if the court
properly found that it owed the defendant unreimbursed
business expenses, it improperly awarded the plaintiff a
turnover order because the expenses at issue constituted
earnings for personal services, which are not the proper
subject of a property execution. We affirm the judgment of
the trial court.
relevant procedural history may be summarized as follows. In
1994, following a foreclosure by sale, the named plaintiff,
Great Country Bank, obtained a deficiency judgment against
the defendant. Later, Great Country Bank assigned its
interest in the deficiency judgment to the plaintiff. In
2013, the plaintiff conducted postjudgment discovery and
concluded that Drywall, a closely held family business, was
in possession of debts that were due and owing to the
defendant, one of its employees. In December, 2013, pursuant
to General Statutes (Rev. to 2013) § 52-356a (a) (1),
plaintiff served on Drywall a personal property execution in
an attempt to collect on the unsatisfied judgment. Drywall
refused this demand for payment.
2014, the plaintiff sought a turnover order against Drywall.
It filed an application for orders in aid of execution
pursuant to General Statutes § 52-356b and a claim for a
determination of interests in the subject property pursuant
to General Statutes § 52-356c. It is not in dispute that
Drywall was served with the application and claim. The court
summoned Drywall to appear at a hearing on these matters,
which took place over the course of three days, September 4,
2014, October 2, 2014, and November 5, 2014. During the
hearing, the plaintiff presented documentary evidence and
testimony from Christina Ogalin (Ogalin), who is both
Dry-wall's president and the defendant's daughter.
Following the hearing, both the plaintiff and Drywall
submitted posttrial briefs. Essentially, the plaintiff argued
that the evidence, which included business records of
Drywall, demonstrated that Drywall owed the defendant un
reimbursed business expenses that he incurred on
Drywall's behalf. Drywall, arguing that the evidence
demonstrated that it had reimbursed the defendant for prior
expenses and that not all of the expenses in evidence had
been incurred by the defendant, contended that it did not owe
the defendant any ‘‘significant
obligation'' in December, 2013, when the property
execution was served on Drywall.
relevant part, the court stated the following in its
memorandum of decision: ‘‘During the hearing on
the plaintiff's application, the only witness was
[Ogalin], who testified in her capacity as president of
Drywall. Her testimony largely focused on the creation of
four manila envelopes that were marked as the plaintiff's
exhibits 3, 4, 5, and 6. On the outside of each of these
exhibits, Ogalin had written in red ink, in three separate
columns, the amount of the expense, the date the expense was
incurred, and the vendor to whom the expense was
paid. Contained within each envelope [were] the
expense receipt[s] . . . itemized on the face of the
envelope. It was estimated that among all four envelopes,
more than 700 individual expenses were itemized. The court
finds that Drywall's accounting and record keeping
practices were sloppy at best and performed in a manner that
defies even basic accounting standards.
October 29, 2013, Ogalin was deposed by the plaintiff in
postjudgment proceedings. During that deposition, the
following colloquy took place:
‘Q. And all of these . . . receipts . . . in these four
folders that are exhibits 3, 4, 5, and 6 and the front pages,
that represents obligations owing from [Drywall] to [the
‘A. Yes. All this will be owed. If not already paid,
some.' . . .
March 13, 2014, in her continued deposition, Ogalin testified
as follows with regard to the creation of the envelopes:
‘Q. You testified a couple of minutes ago that you
never wrote the first check for expense reimbursement
concerning a document, such as an exhibit, which is now
exhibit 9, until the front face of the document was complete.
‘A. I normally would generate the receipts and have a
total on the manila [envelope], and from that total would
write out checks when the business had money, and then that
total would be wiped out once I hit that total. And then
would go to the next manila [envelope] and next manila
[envelope] and so on. Everything has been paid and accounted
for but, like I said, that would be an amount, and that's
how I would do it. . . .'
the hearing on the plaintiff's application, Ogalin
testified contrary to her prior sworn deposition testimony.
Most significantly, she claimed [at the hearing] that all the
expenses had been reimbursed prior to her creating
the manila envelopes, not before. In addition, it was her
testimony that the expenses were not incurred by the
defendant alone. Rather, they were expenses incurred by her
brother [Frank F. Ogalin III], who is also an officer in the
corporation, as well as herself and [the defendant]. There
was also conflicting testimony as to how those receipts were
maintained. At one point, Ogalin testified that receipts were
kept in separate bags depending upon who incurred the
expense. There was also testimony that all the receipts were
comingled, regardless of who incurred the expense. Again, as
the court noted previously, the accounting and record keeping
methods employed by Ogalin and Drywall were so poor that it
is almost impossible to place any credibility in their
[posttrial] litigation [had] commenced, Ogalin attempted to
create a spreadsheet in which she allocated each individual
expense to either herself, [the defendant], or [Frank Ogalin
III]. The court does not find this testimony credible. First,
when deposed, Ogalin made clear that she only issued
reimbursement after she totaled the expenses on the outside
of each envelope and knew the aggregate total of those
expenses. Such a process would be the logical method of
issuing reimbursement, as one would need to know how much
needs to be reimbursed before issuing any payment. To now
claim that payments were made to reimburse expenses before
the actual value of those expenses was determined is not
logical [or] credible. Moreover, to now assert that these
expenses were comingled expenses incurred by the defendant,
[Frank Ogalin III], and herself also lacks credibility.
[Ogalin] previously testified under oath that the receipts
contained in these individual envelopes were expense
reimbursements owed to the defendant alone. Her testimony,
that in 2014 she created a spreadsheet allocating those
expenses between three individuals, based on her memory of
approximately 700 individual receipts from a multitude of
different vendors, also lacks credibility. No individual is
capable of recalling who incurred a specific expense out of
all of the many individual expenses [at issue], some dating
back as many as five years. . . .
the court evaluates the credibility of the testimony of
Ogalin, scrutinizes all the exhibits, and considers the
business practices of Drywall and its accounting methods, the
court finds that as of December 3, 2013, the date of the
plaintiff's property execution issued to Drywall, Drywall
owed the defendant unreimbursed business expenses in the
amount of $19, 887.27. The court has reduced the total sum by
those expenses not attributable to the business of Drywall.
regard to the plaintiff's claim of a $4300 loan repayment
obligation due the defendant from Drywall, the plaintiff has
not met its burden of proof that this was still owed to the
defendant as of the date of the property execution. This
portion of the turnover order is denied.
the foregoing reasons, the court grants the plain- tiff's
[application for a] turnover order in the amount of ...