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Reinke v. Sing

Court of Appeals of Connecticut

December 18, 2018


          Argued September 11, 2018

         Procedural History

         Action for the dissolution of a marriage, and for other relief, brought to the Superior Court in the judicial district of Stamford-Norwalk and tried to the court, Hon. Dennis F. Harrigan, judge trial referee; judgment dissolving the marriage and granting certain other relief in accordance with the parties' stipulation; thereafter, the court, Shay, J., granted the plaintiff's motion to open the judgment and issued certain orders; subsequently, the court, Shay, J., issued a corrected memorandum of decision, and the plaintiff appealed to this court; thereafter, the court, Shay, J., issued an articulation of its decision; subsequently, this court reversed the trial court's judgment and remanded the case with direction to deny the plaintiff's motion to open; thereafter, the plaintiff filed a petition for certification to appeal with our Supreme Court, which granted the petition and remanded the matter to this court to consider the plaintiff's claims. Affirmed.

          Eric M. Higgins, for the appellant (plaintiff).

          Reine C. Boyer, for the appellee (defendant).

          Keller, Bright and Beach, Js.


          KELLER, J.

         This appeal returns to the Appellate Court on remand from our Supreme Court for resolution of the claims raised by the plaintiff, Gail Reinke. Reinke v. Sing, 328 Conn. 376, 179 A.3d 769 (2018).[1] The plaintiff appeals from the judgment of the trial court after it reissued several financial orders that were part of an original judgment that dissolved her marriage to the defendant, Walter Sing. The plaintiff claims that the court erred (1) by failing to find that the defendant committed fraud when he submitted inaccurate financial affidavits to the court at the time of the original dissolution judgment, (2) with respect to its alimony award, (3) with respect to its distribution of property, (4) with respect to its award of attorney's fees, and (5) by failing in its financial orders to promote full and frank disclosure in financial affidavits and by failing to address adequately the defendant's omission of substantial income and assets from the financial affidavits that he filed at the time of the original dissolution judgment. We affirm the judgment of the trial court.

         Several facts are not in dispute. The parties were married in 1989. On October, 2, 2007, their marriage was dissolved by the trial court, Hon. Dennis F. Harrigan, judge trial referee. At the time of this original dissolution judgment in 2007, the plaintiff was forty-seven years of age and the defendant was fifty-six years of age. The plaintiff, who holds a bachelor's degree, was a homemaker during the marriage, but occasionally worked in a part-time capacity. The defendant, who holds a degree in mathematics, worked steadily throughout the marriage and, at the time of the dissolution proceedings, was a self-employed information technology consultant. There were two children of the marriage. At the time of the original dissolution, the parties' son was seventeen years of age and their daughter was fourteen years of age. At the time of the subsequent judgment at issue in the present appeal, both children had reached the age of majority.

         The parties' written ‘‘Stipulation for Judgment'' was incorporated by reference into the original judgment of dissolution. Among the financial provisions in the original decree, the defendant was ordered to pay the plaintiff $3, 333.33 in unallocated alimony and child support each month, beginning on October 1, 2007, subject to de novo review at the request of either party beginning on October 1, 2016. Generally, the stipulation incorporated in the judgment reflected the parties' intent to divide their marital assets equally.

         On May 4, 2010, the plaintiff filed a motion to open the judgment of dissolution on the ground that the defendant engaged in fraud during the original dissolution proceedings by failing to disclose in his financial affidavit information concerning the extent of his assets. According to the plaintiff, this resulted in an undervaluation of the defendant's assets by approximately $160, 000. The plaintiff asked for the case to be opened ‘‘for the purpose of complete discovery and an equitable distribution of the parties' entire marital estate.''

         On September 28, 2010, by agreement of the parties, the court, Shay, J., opened the original judgment of dissolution for purposes of reassessing the financial orders. In opening the judgment, the court did not make any finding with respect to fraud, nor did the parties stipulate that fraud had occurred. Thereafter, the parties engaged in extensive discovery for over two and one half years.

         On August 23, 2013, following a six day trial, the court found that, at the time of the original dissolution judgment in 2007, the defendant had underreported his assets. In light of the underreporting that had occurred, the court entered numerous financial orders that, in several material ways, differed from those in the original judgment. In its memorandum of decision, the court stated in relevant part: ‘‘[T]he evidence supports a finding that there are substantial discrepancies between the [defendant's] income as first reported at the time of the original hearing and what actually should have been reported. In fact, the stipulation of the parties was based upon the assumption that the [defendant] had gross income of $100, 000, when, in fact, he was earning twice that. . . . The [defendant] has filed multiple financial affidavits over the course of the case, thus presenting the court with the proverbial ‘moving target.' In calculating the [defendant's] net income, the court has not factored in business expenses, since the [defendant] offered no credible evidence as to the amount of [the] same. The court has, however, taken into consideration state and federal taxes, and his health insurance premiums. Accordingly, the court calculates his net weekly income as $2061. . . .

         ‘‘As to the marital estate, while the differences are not as dramatic, nevertheless, they exist. A comparison to investment accounts shows an underreporting of $16, 574 . . . or an 8.5 percent difference. The same comparison with regard to retirement accounts yields a more dramatic difference of $63, 655 . . . or 62 percent. In addition, no life insurance was shown on the corrected financial affidavit, where $250, 000 term insurance insuring the [defendant's] life was disclosed on the original financial affidavit, and less debt is reported on the corrected affidavit than on the original. Finally, the [defendant] failed to disclose to the [plaintiff] that he anticipated approximately $100, 000 in income tax refunds, which he ultimately did receive and put to his own use.

         ‘‘The [plaintiff] testified at length about abusive behavior by the [defendant], physical and mental, throughout the course of the marriage. There is some evidence to support her claims, however, much of it is anecdotal. The family was further stressed by problems concerning their son . . . .

         ‘‘A substantial number of the terms of the stipulation for judgment have already been satisfied in part or in full, including investment accounts, retirement accounts, automobiles, and other personal property. On the other hand, in addition to the omission of certain assets, the evidence supports a finding that the [plaintiff's] one-third interest in the condominium in Jersey City, New Jersey, that is shared with the [defendant's] brother, and which was to be transferred to the [defendant] in the settlement in return for a $22, 000 payment to the [plaintiff], was undervalued. The evidence supports a valuation of her interest as $58, 833. The [defendant] gave the [plaintiff] a check for $22, 000, but, to date, she has failed to deliver a deed of her interest to him.

         ‘‘The principal remaining undivided marital asset is the family home . . . currently occupied by the [defendant], which the parties have stipulated [has] a fair market value of $1, 565, 000, against which there is combined mortgage debt of approximately $650, 000. The house is currently listed for sale.''

         In light of all of the circumstances, the court found that the parties' 2007 stipulation, which had been incorporated by reference in the original decree, was fair and equitable and that, apart from the areas in which it would be modified by the court, it was incorporated into the new decree. The court stated that, in crafting the final decree, it would take into account the partial division of the marital estate that already had occurred pursuant to the parties' stipulation. The court found that there were no exceptional intervening circumstances and, thus, it was appropriate to base its division of the estate on its value as of the date of the original judgment of dissolution.

         Among the most significant ways in which the court modified the original decree, [2] it altered the defendant's alimony obligation by ordering him to pay the plaintiff $4425 in alimony monthly beginning on October 1, 2007, until May 31, 2010; $4000 in alimony monthly beginning on June 1, 2010, until May 31, 2011; and $3500 in alimony monthly beginning on June 1, 2011, until May 31, 2016. The court specified that its award was nonmodifiable with respect to its term and that the arrearage created by its new order was to be paid to the plaintiff at the rate of $500 per month until paid in full. The court did not modify the defendant's child support obligation. As the parties agree, the court equally divided between them those assets that it found had been undervalued or not disclosed previously by the defendant. As an award of attorney's fees in connection with this case, the court ordered the defendant to pay the plaintiff herself $20, 000, her current counsel $10, 000, and her former counsel $10, 000. This resulted in an award of attorney's fees totaling $40, 000.

         Thereafter, the plaintiff appealed. In 2015, when this appeal was previously before this court, the trial court was ordered, in relevant part, to articulate ‘‘whether it found that there was no fraud or whether it simply was not making an express finding regarding fraud. If the latter, the court is ordered further to articulate whether it found that there had been fraud as to the first judgment of dissolution.''[3] In its articulation of July 29, 2015, the trial court stated in relevant part that it had granted the plaintiff's motion to open the judgment of dissolution ‘‘by agreement of the parties'' and ‘‘[a]t that time, [it] made no express finding of fraud. Although the [defendant] did not voluntarily concede any fraudulent dealings on his part, by agreeing to open the judgment, he impliedly conceded the fact that the [plaintiff's] allegations would, if proven, be a sufficient basis for opening the judgment of dissolution. . . . Moreover, the [plaintiff] was never precluded from raising the issue of fault at the time of the new hearing, which is, in fact, just what she did. . . .

         ‘‘While the court found that the [defendant] had originally failed to fully disclose some of his assets and understated his income, it made neither an express finding that his failure to do so amounted to fraud, nor, for that matter, that his behavior did not amount to fraud. In short, under all the circumstances, the [plaintiff] failed to meet her burden to establish fraud to the satisfaction of the court by clear and convincing evidence. . . . Moreover, the court believes that a finding that fraud was not proven could be fairly implied from a reading of the decision as a whole, in particular, relative to its other specific findings and as to the relief granted.'' (Citations omitted; emphasis in original; internal quotation marks omitted.)[4]

         This appeal followed. Additional facts will be set forth as necessary in our analysis of the plaintiff's claims.


         First, we address the plaintiff's claim that the court erroneously failed to find that the defendant committed fraud when he submitted inaccurate financial affidavits to the court at the time of the original dissolution judgment.[5] We disagree.


         In the first subpart of the present claim, the plaintiff asserts that the court improperly required her to bear the burden of proving that the defendant had engaged in fraud. She argues that, in light of the defendant's fiduciary-like obligation to make full and frank disclosures on his financial affidavits, the court should have required the defendant to prove fair dealing by clear and convincing evidence.

         ‘‘When a party contests the burden of proof applied by the court, the standard of review is de novo because the matter is a question of law.'' (Internal quotation marks omitted.) Rollar Construction & Demolition, Inc. v. Granite Rock Associates, LLC, 94 Conn.App. 125, 133, 891 A.2d 133 (2006).

         To provide necessary context for the plaintiff's argument, we set forth some basic legal principles concerning breach of fiduciary duty actions. ‘‘Once a [fiduciary] relationship is found to exist, the burden of proving fair dealing properly shifts to the fiduciary. . . . Furthermore, the standard of proof for establishing fair dealing is not the ordinary standard of fair preponderance of the evidence, but requires proof either by clear and convincing evidence, clear and satisfactory evidence or clear, convincing and unequivocal evidence. . . . Proof of a fiduciary relationship, therefore, generally imposes a twofold burden on the fiduciary. First, the burden of proof shifts to the fiduciary; and second, the standard of proof is clear and convincing evidence.'' (Internal quotation marks omitted.) Papallo v. Lefebvre, 172 Conn.App. 746, 754, 161 A.3d 603 (2017); see also Chioffi v. Martin, 181 Conn.App. 111, 137, 186 A.3d 15 (2018); Iacurci v. Sax, 139 Conn.App. 386, 394 n.2, 57 A.3d 736 (2012) (‘‘in cases involving claims of fraud, self-dealing or conflict of interest, a fiduciary bears the burden of proving fair dealing by clear and convincing evidence''), aff'd, 313 Conn. 786, 99 A.3d 1145 (2014).

         The plaintiff does not direct our attention to any portion of the record in which she explicitly asked the court to require the defendant to prove fair dealing by clear and convincing evidence or objected on the ground that the court incorrectly had allocated the burden of proof to her. Nor does the plaintiff draw our attention to any portion of the record in which she explicitly argued before the court that the defendant, consistently identified throughout the proceedings as her spouse, was in a fiduciary relationship with her. Our careful review of the relevant pleadings reflects that the plaintiff did not plead that the defendant was a fiduciary or that he owed her the duties that are owed to a beneficiary of a fiduciary relationship.

         At trial, the plaintiff, relying on Billington v. Billington, 220 Conn. 212, 595 A.2d 1377 (1991), stressed that the defendant had an obligation to disclose fully his income and assets in the financial affidavits that he submitted to the court at the time of the original dissolution judgment in 2007, that he failed to do so, and that the plaintiff was entitled to recourse for his failure in this regard. At the conclusion of the trial, the plaintiff's counsel argued that the marital relationship was ‘‘quasi fiduciary in nature.''

         In parts II, III, IV, and V of this opinion, we address the plaintiff's claims that some of the court's financial orders reflected an abuse of discretion. Consistent with the arguments advanced at trial, in those claims, the plaintiff relies on Billington, in which our Supreme Court abandoned the requirement that a party seeking to open a dissolution judgment on the basis of fraud must demonstrate that it exercised diligence in the original dissolution action in order to discover and expose the fraud. Billington v. Billington, supra, 220 Conn. 218. The court's discussion in Billington illuminates the obligation borne by both parties in dissolution actions to provide the court with an accurate financial affidavit as required by Practice Book § 25-30. The court explained in relevant part: ‘‘Our cases have uniformly emphasized the need for full and frank disclosure in that affidavit. A court is entitled to rely upon the truth and accuracy of sworn statements required by [Practice Book § 25-30 (formerly Practice Book § 463)], and a misrepresentation of assets and income is a serious and intolerable dereliction on the part of the affiant which goes to the very heart of the judicial proceeding. . . . These sworn statements have great significance in domestic disputes in that they serve to facilitate the process and avoid the necessity of testimony in public by persons still married to each other regarding the circumstances of their formerly private existence. . . . Thus, the requirement of diligence in discovering fraud is inconsistent with the requirement of full disclosure because it imposes on the innocent injured party the duty to discover that which the wrongdoer already is legally obligated to disclose. . . .

         ‘‘This principle of complete disclosure is consistent with the notion that the settlement of a marital dissolution case is not like the settlement of an accident case. It stamps with finality the end of a marriage. . . . Courts simply should not countenance either party to such a unique human relationship dealing with each other at arms' length. Whatever honesty there may, or should, have been during the marriage should at least be required by the court at its end. . . .

         ‘‘We have recognized, furthermore, in the context of an action based upon fraud, that the special relationship between fiduciary and beneficiary compels full disclosure by the fiduciary. . . . Although marital parties are not necessarily in the relationship of fiduciary to beneficiary, we believe that no less ...

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