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Steller v. Steller

Court of Appeals of Connecticut

May 1, 2018


          Argued January 30, 2018

         Procedural History

         Action for the dissolution of a marriage, and for other relief, brought to the Superior Court in the judicial district of New Haven and tried to the court, Swienton, J.; judgment dissolving the marriage and granting certain other relief in accordance with the parties' settlement agreement; thereafter, the court, Shluger, J., granted the defendant's motion for modification of alimony, life insurance and disability insurance and issued certain orders, and the plaintiff appealed to this court; subsequently, the court, Shluger, J., issued an articulation of its decision. Reversed; further proceedings.

          Samuel V. Schoonmaker IV, with whom was Wendy Dunne DiChristina, for the appellant (plaintiff).

          Leslie I. Jennings-Lax, for the appellee (defendant).

          Sheldon, Keller and Bright, Js.


          BRIGHT, J.

         The plaintiff, Linda Steller, appeals from the judgment of the trial court modifying the alimony, life insurance, and disability insurance obligations of the defendant, Rodney Steller. The plaintiff claims that the trial court: (1) improperly determined that the defendant's earning capacity was less than his actual income and then based its alimony order on that determination; (2) made clearly erroneous findings, which were unsupported by the evidence, regarding the defendant's gross and net earning capacities, her earning capacity, and the amount she would receive from the purported sale of the defendant's dental practice later that year; (3) failed to apply the proper legal principles, in accordance with General Statutes § 46b-82 and relevant case law, for resolving a motion for modification of alimony; and (4) abused its discretion by lowering the defendant's disability and life insurance obligations. We agree with the plaintiff on the second claim and reverse the judgment of the trial court.

         The following facts inform our review. The parties were married in 1973, and two children were born of that marriage, both of whom have reached adulthood. On October 21, 2008, the court rendered a judgment dissolving the parties' marriage, which incorporated by reference the parties' settlement agreement (agreement). Article 4.1 of the agreement provides in relevant part that the defendant will pay to the plaintiff alimony in the amount of $8333.33 per month, which is nonmodifiable for the first four years, unless circumstances arise that substantially reduce the defendant's earnings or earning capacity based upon his health or some outside factor, not including the voluntary sale of his dental practice. Article 4.1 also defines ‘‘substantially diminishes his earnings'' to mean ‘‘that the [defendant's] earnings are reduced to less than TWO HUNDRED THIRTY-SEVEN THOUSAND, FIVE HUNDRED DOLLARS ($237, 500) per year, gross income from employment.''

         Article 4.3 of the agreement provides that the defendant is entitled to retire at the age of sixty-five, and that he is entitled to a ‘‘second look'' at his alimony obligation upon reaching age sixty-five, without the need for establishing a substantial change in circumstances.[1] The agreement requires the defendant to maintain life insurance in the amount of $750, 000 to secure the plaintiff's entitlement to alimony. This amount is reducible, in the defendant's discretion, by $100, 000 per year, commencing on the fifth anniversary of the judgment, provided it may not be reduced below $450, 000 until the termination of alimony or pursuant to court order. The agreement also requires that the defendant maintain disability insurance in the amount of $10, 000 per month, modifiable as of the fifth year of the judgment. Additionally, the agreement provides that, if the defendant sells his interest in his dental practice, he shall pay to the plaintiff a sum equal to 20 percent of the net consideration received at the time of sale and the closing of title.

         Following the defendant's sixty-fifth birthday, he filed a motion, on the basis of the October 21, 2008 judgment and the parties' agreement, requesting a modification or termination of alimony and of life insurance and disability insurance, contending that he has reached the age of sixty-five and that, although he ‘‘has not yet retired, he wishes to reduce his workload and work schedule but is refraining from doing so [to] the extent desired until he can determine his alimony obligation, if any, going forward.''

         On January 29, 2016, the court held a hearing on the defendant's motion, and, in a February 3, 2016 memorandum of decision, it set forth the following relevant findings. At the time of the parties' dissolution, the plaintiff earned approximately $6000 per year working as the office manager/receptionist/bookkeeper for the defendant's dental practice, and the defendant earned $378, 000 per year. Both parties worked full time. Their forty-three page agreement, which had been incorporated into the judgment of dissolution, provided for a distribution of the parties' $2.5 million in marital assets. The plaintiff was awarded substantial assets through the agreement. She currently ‘‘has mutual funds, [individual retirement accounts] and annuities worth $1 million. She claims to earn only $59 per week or approximately $3000 per year on dividends from her investments . . . . In addition she owns a home which she values at $450, 000 with a $273, 000 mortgage or $176, 000 in equity.'' Since the date of dissolution, the plaintiff has not sought employment or ascertained the amount of her forthcoming social security benefits, despite knowing that the alimony provision in the agreement is modifiable and that the defendant is entitled to request a second look at alimony upon reaching the age of sixty-five. The plaintiff works as a nanny for her grandchildren approximately forty hours per week for no fee. She has no earned income. The court found that the plaintiff has an earning capacity of $20, 800 per year.[2]

         As to the defendant, the court found that he consistently has worked forty hours per week over the years and that he earned approximately $528, 000 in 2013, $469, 000 in 2014, and $260, 000 in 2015. The court further found that the defendant wants to reduce his workload to thirty-three hours per week, with increased vacation time to ten weeks per year. Consequently, the court found that the defendant has an earning capacity of $200, 000 per year. The court further found that the defendant was expected to sell his dental practice later in 2016, for the estimated amount of $600, 000, at which time the plaintiff would receive $120, 000 as a result of that sale.

         The court also stated that the plaintiff's financial affidavit provides that her expenses have been reduced to $106, 000 per year, [3] but the court found that the plaintiff's expenses were inflated and that she ‘‘could continue to enjoy her present lifestyle without the necessity of working with $78, 156 per year.'' Further, the court found that the plaintiff is ‘‘woefully ignorant as to her financial circumstances, opportunities, and investments . . . [as well] as to her Social Security rights . . . .''

         On the basis of these findings, the court, stating that it had considered the statutory criteria set forth in § 46b-82, granted the defendant's motion for modification and modified his alimony, life insurance, and disability insurance obligations. Specifically, the court ordered, effective June 9, 2016, [4] the plaintiff's sixty-sixth birthday, the defendant's alimony obligation reduced to $60, 000 per year and his life and disability insurance obligations reduced by 50 percent.[5] This appeal followed.[6]

         We begin by setting forth the standard of review. ‘‘An appellate court will not disturb a trial court's orders in domestic relations cases unless the court has abused its discretion or it is found that it could not reasonably conclude as it did, based on the facts presented. . . . In determining whether a trial court has abused its broad discretion in domestic relations matters, we allow every reasonable presumption in favor of the correctness of its action. . . . Notwithstanding the great deference accorded the trial court in dissolution proceedings, a trial court's ruling on a modification may be reversed if, in the exercise of its discretion, the trial court applies the wrong standard of law.'' (Citation omitted; internal quotation marks omitted.) Williams v. Williams, 276 Conn. 491, 496-97, 886 A.2d 817 (2005). ‘‘Furthermore, [t]he trial court's findings [of fact] are binding upon this court unless they are clearly erroneous in light of the evidence and the pleadings in the record as a whole. . . . A finding of fact is clearly erroneous when there is no evidence in the record to support it . . . or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.'' (Internal quotation marks omitted.) Norberg-Hurlburt v. Hurlburt, 162 Conn.App. 661, 672-73, 133 A.3d 482 (2016).

         ‘‘In a marriage dissolution action, an agreement of the parties executed at the time of the dissolution and incorporated into the judgment is a contract of the parties. . . . The construction of a contract to ascertain the intent of the parties presents a question of law when the contract or agreement is unambiguous within the four corners of the instrument. . . . The scope of review in such cases is plenary . . . [rather than] the clearly erroneous standard used to review questions of fact found by a trial court.'' (Citation omitted; internal quotation marks omitted.) Williams v. Williams, supra, 276 Conn. 497. Because the language of the agreement in the present case, as incorporated into the dissolution judgment, is clear and unambiguous, our review is plenary.

         ‘‘[Our Supreme Court] and [this court] have often described financial orders appurtenant to dissolution proceedings as entirely interwoven and as a carefully crafted mosaic, each element of which may be dependent on the other. . . . In general, the same factors used by the court to establish an initial award of alimony are relevant in deciding whether the decree may be modified. . . . More specifically, these criteria, outlined in . . . § 46b-82, require the court to consider the needs and financial resources of each of the parties . . . as well as such factors as the causes for the dissolution of the marriage and the age, health, station, occupation, employability and amount and sources of income of the parties.'' (Citations omitted; footnote omitted; internal quotation marks omitted.) Gay v. Gay, 70 Conn.App. 772, 776, 800 A.2d 1231 (2002), aff'd in part, 266 Conn. 641, 835 A.2d 1 (2003). We now consider each of the plaintiff's claims.


         The plaintiff first claims that the court ‘‘improperly determined that the defendant's earning capacity was lower than his actual current income, and then based its orders on his earning capacity rather than actual income.'' She argues: ‘‘A voluntary retirement does not result in a loss of earning capacity, just as a proposed reduction in hours is not the same as a loss of earning capacity. . . . [A]scribing a loss of earning capacity to the defendant when he is still working and completely employable at his current occupation is speculative and a misapplication of the law. He may or may not reduce his hours; he may retire or he may not.'' (Emphasis in original.)

         The defendant argues that the court properly construed the term ‘‘earning capacity.'' He argues that the court ‘‘had before it evidence that the defendant was reducing his work hours and that the reduction in work hours would lead to a reduction in earnings.'' Further, the defendant argues that, because he reached the age of sixty-five and is entitled to a second look at alimony on the basis of the dissolution judgment, without a showing of a substantial change, and because he is experiencing health issues such as a stiff neck, arthritis, and increased stress, the court properly found that his earning capacity was reduced by his age and circumstances. We agree with the defendant.

         Section 46b-82 (a) provides in relevant part: ‘‘In determining whether alimony shall be awarded, and the duration and amount of the award, the court shall consider the evidence presented by each party and shall consider the length of the marriage, the causes for the . . . dissolution of the marriage . . . the age, health, station, occupation, amount and sources of income, earning capacity, vocational skills, education, employ-ability, estate and needs of each of the parties . . . .''

         ‘‘It is well established that the trial court may under appropriate circumstances in a marital dissolution proceeding base financial awards on the earning capacity of the parties rather than on actual earned income. . . . Earning capacity, in this context, is not an amount which a person can theoretically earn, nor is it confined to actual income, but rather it is an amount which a person can realistically be expected to earn considering such things as his vocational skills, employability, age and health. . . . [I]t also is especially appropriate for the court to consider whether the defendant has wilfully restricted his earning capacity to avoid support obligations . . . . Moreover, [l]ifestyle and personal expenses may serve as the basis for imputing ...

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