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Lavy v. Lavy

Court of Appeals of Connecticut

May 21, 2019

GAD LAVY
v.
MICHELE BROWN LAVY

          Argued January 9, 2019

         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, where the court, Hon. Stanley Novack, judge trial referee, rendered judgment dissolving the marriage and granting certain other relief; thereafter, the court, Malone, J., denied the plaintiff's motion to strike and request to revise; subsequently, the court, Emons, J., approved the stipulation of the parties to conduct certain discovery; thereafter, the court, Heller, J., granted the defendant's motion to open and reform the judgment, and the plaintiff appealed to this court; subsequently, the court, Heller, J., granted the defendant's motion for postjudgment interest, and the plaintiff filed an amended appeal. Affirmed.

          Alexander J. Cuda, for the appellant (plaintiff).

          Eric M. Higgins, with whom, on the brief, was Sarah Gleason, for the appellee (defendant).

          Prescott, Elgo and Harper, Js.

          OPINION

          PRESCOTT, J.

         The plaintiff, Gad Lavy, appeals from the judgment of the trial court granting the motion of the defendant, Michele Brown, [1] to open and reform the parties' marital dissolution judgment because the plaintiff failed to disclose on his financial affidavit two marital assets: a savings account with First Niagara Bank, N.A., formerly known as NewAlliance Bank (Niagara account), and real property located in the Middle East (Jerusalem property). The plaintiff later amended this appeal to challenge the court's subsequent decision to grant the defendant's motion for an award of postjudgment interest. On appeal, the plaintiff claims that the court improperly (1) found that his failure to disclose the Niagara account and Jerusalem property on his financial affidavit constituted material omissions that triggered remedial measures set forth in the parties' separation agreement, which was incorporated by reference into the judgment of dissolution, (2) awarded the defendant prejudgment interest despite her having requested such relief for the first time in her posthearing brief, and (3) awarded the defendant postjudgment interest during the pendency of the appeal, purportedly in violation of the automatic appellate stay. We reject the plaintiff's claims and, accordingly, affirm the judgment of the trial court.

         The following facts and procedural history, which were found by the court or are uncontested, are relevant to our resolution of the plaintiff's claims. The court dissolved the parties' marriage on June 14, 2011, following an uncontested hearing. The judgment of dissolution incorporated by reference the parties' separation agreement. The parties attached to the separation agreement financial affidavits dated June 14, 2011.

         In article XXI, paragraph 21.1, of the separation agreement, the parties represented that their attached financial affidavits were true and accurate. They further stated that they had relied on the facts set forth in those financial affidavits in reaching the terms and financial arrangements set forth in the separation agreement. Paragraph 21.1 further provides: ‘‘Each party expressly represents that there has been no substantial change in circumstances to [either party] since the date of said affidavits and that said affidavits fully, fairly and accurately [sets] forth the existing assets, liabilities, and income of the parties. The parties expressly represent to each other that they do not own any other assets nor are any assets being held by a third party for the benefit of either [party], except those described and divided under the terms of this agreement and the parties' respective financial affidavits. Each party represents that he or she relied on the financial affidavits and voluntary disclosures and representations made by the other party in the course of this dissolution of marriage action for purposes of arriving at the terms of this agreement. The parties further acknowledge that each has a fiduciary duty to the other to make a full and fair disclosure of his or her financial circumstances, including all assets, to the other in connection with this proceeding. In the event of a material omission or misstatement by either party in his or her affidavit, the other party shall have the right to rescind this [a]greement and reopen and reform any judgment entered in the pending action incorporating the terms hereof.'' Article XXI of the separation agreement further provides that if either party made a material omission of an asset on his or her financial affidavit, the other party would be entitled to receive 75 percent of the undisclosed asset's value measured at the time of dissolution. The party who failed to disclose an asset also would be liable for the other party's ‘‘reasonable legal fees, expert fees, and court costs.''

         On August 9, 2011, the defendant filed a motion to open and reform the June 14, 2011 judgment of dissolution, invoking article XXI of the separation agreement. According to the defendant, the plaintiff had failed to disclose on his June 14, 2011 financial affidavit the existence of the Jerusalem property, which she described as a condominium apartment and storeroom. She also claimed there was a ‘‘likelihood beyond mere suspicion that the plaintiff has failed to disclose additional assets as yet unknown to the defendant'' because his financial affidavit did not disclose any bank accounts in Israel or other means by which the plaintiff could pay the taxes and costs associated with owning the condominium. The defendant asked the court to open the dissolution judgment for the purpose of conducting limited discovery and, if necessary, to distribute any undisclosed property in accordance with the separation agreement, including awarding reasonable attorney's fees and costs.

         In response to the defendant's motion to open, the plaintiff initially filed a motion to dismiss asserting insufficiency of process, which he later withdrew. He subsequently filed a motion to strike, challenging the legal sufficiency of the defendant's motion, and a request to revise. The court denied both motions. The defendant never filed a written opposition addressing the merits of the motion to open.

         On December 14, 2011, the defendant amended her motion to open and reform the dissolution judgment, asserting that, since filing her initial motion, she had learned of additional grounds for granting the motion. Specifically, in addition to reasserting the allegations in her initial motion to open, the defendant asserted that the plaintiff had failed to disclose the existence of the Niagara account, which she described as a savings account that had been open for at least three years and, thus, existed at the time the plaintiff submitted his June 14, 2011 financial affidavit.

         The parties eventually executed as tipulation in which they agreed to have the court open the dissolution judgment for the limited purpose of conducting discovery. The stipulation expressly provided that it was ‘‘not an admission of any misrepresentation or fraud on the part of either party with respect to the representations made at the time of [j]udgment.'' The court approved the stipulation and made it an order of the court on November 5, 2012.

         On June 15, 2016, the plaintiff filed a motion in which he asserted that the defendant had opened the Niagara account in the plaintiff's name, without his knowledge, using her own funds, and, thus, she had a duty to disclose the Niagara account on her financial affidavit. According to the plaintiff, the defendant's failure to disclose the existence of the account entitled him to an award of legal fees and costs under the terms of the separation agreement.

         The court conducted an evidentiary hearing on the defendant's motion to open, as amended, on November 16 and 17, 2016. At that time, the court also considered the plaintiff's motion for an award of costs and attorney's fees. The parties submitted post hearing memoranda and reply memoranda. The court later granted a request by the defendant for additional oral argument, which it heard on April 11, 2017.

         The court issued a memorandum of decision on August 7, 2017, granting the defendant's motion to open and reform the dissolution judgment. With respect to the Jerusalem property, the court found that the plaintiff's brother had conveyed the property to him for no consideration and that a title abstract reflecting the conveyance had been recorded in the Jerusalem land registry on January 27, 1999.[2] The plaintiff remained the record owner of the Jerusalem property at the time of the dissolution judgment. Although the plaintiff testified that he had not included the Jerusalem property on his financial affidavit because he did not know he owned the property, the court did not find that testimony credible. Rather, the court credited the testimony of the defendant's real estate expert, Attorney Yoram Hacohen, [3] who opined that before a conveyance for no consideration could be recorded on the land records in Jerusalem, the grantee, in this case the plaintiff, would have been required to sign a number of legal documents.[4] The court found that the fair market value of the Jerusalem property, measured in United States dollars at the time of the dissolution judgment, was $146, 379. The court further found that the plaintiff's failure to include the Jerusalem property on his June 14, 2011 financial affidavit was a material omission.[5]

         The court made the following findings relative to the defendant's knowledge of the Jerusalem property at the time of the dissolution judgment. ‘‘The Jerusalem property came to [the defendant's] attention as a result of her efforts to locate property that was owned by [the plaintiff] in Israel. . . . [I]n early 2011, she and her counsel in the dissolution action had retained an attorney in Israel to find out whether [the plaintiff] owned any property there. That attorney engaged a private investigator, who advised them that [the plaintiff] did not own any real property in Israel. Shortly before the uncontested dissolution hearing, however, [the defendant's] boyfriend, who was also a lawyer, hired a different attorney in Israel. That attorney reported that [the plaintiff] owned a condominium in Jerusalem and forwarded a copy of a document from the land records.

         ‘‘Despite the conflicting, unverified reports that she had received regarding a possible asset belonging to [the plaintiff] that he had not disclosed, [the defendant] determined to proceed with the uncontested dissolution hearing on June 14, 2011. . . . [S]he did so because of the tremendous distrust and acrimony that existed between the parties at that time. She was afraid that if she did not go ahead with the uncontested divorce in June, 2011, that [the plaintiff] would deny her a get- a divorce under Jewish religious law-and thus prevent her from remarrying in the Jewish faith. She also believed that she would have recourse under article XXI of the June, 2011 separation agreement if she later established that [the plaintiff] owned property in Israel which was not reflected on his June 14, 2011 financial affidavit.''

         Regarding the Niagara account, the court found that the account was opened in July, 2008, with an initial deposit of $89, 146.50. The balance of the Niagara account as of April 28, 2011, was $92, 432.[6] The court further found that, although the plaintiff owned the Niagara account on the date of entry of the dissolution judgment, he failed to disclose that account on his financial affidavit, and this constituted a material omission under the separation agreement.[7] The plaintiff testified that, as with the Jerusalem property, he did not know that the account existed. The court, however, did not credit this assertion.

         The court found that the defendant was the person who originally had funded the Niagara account with money from her office.[8] The defendant opened the Niagara account in the plaintiff's name, in trust for the parties' son. The plaintiff signed the original documents necessary to open the account in two places. The defendant never signed the account-opening documents, never deposited any additional money into the Niagara account after the initial deposit, and never made any withdrawals or had anything to do with the account after it was opened. Although the plaintiff's name appeared on the bank account statements, the defendant's office address was listed on the statement as the depositor's address rather than the plaintiff's office address. According to the defendant and her office manager, however, no statements were ever delivered to her office.

         With respect to the receipt of banking statements and other correspondences relative to the Niagara account, the court made the following additional findings: ‘‘From July, 2008, when [the Niagara account] was opened, through the parties' divorce in June, 2011, [the defendant's] office was at 999 Summer Street, suite 302, and [the plaintiff's] office was two buildings away, at 1275 Summer Street, in Stamford. Counsel for [the defendant] suggested that [the Niagara account] statements and [other forms] were simply delivered to [the plaintiff] at his office on the same street. The plaintiff denied receiving [the Niagara account] statements or any [other forms] from the bank.'' The court did not expressly resolve the issue regarding the delivery and receipt of the bank statements, but credited the defendant's testimony that she was not aware that the Niagara account still existed as of the date of entry of the dissolution judgment, and that she first learned that it remained open when an escheat letter from the bank, addressed to the plaintiff, was mailed to her office address in November, 2011.

         On the basis of its findings that the plaintiff had failed to disclose both the Jerusalem property and the Niagara account on his June 14, 2011 financial affidavits, and that the failure to disclose those assets qualified as material omissions under the terms of the separation agreement, the court ordered the plaintiff to pay the defendant an additional $179, 109, which represented 75 percent of the value of the undisclosed assets at the time of the dissolution judgment. The court also awarded the defendant prejudgment interest from the date of the dissolution judgment at the annual rate of 5 percent or $55, 141, for a total of $234, 250. Moreover, the court determined that the defendant was entitled to costs and reasonable attorney's fees totaling $194, 123.76. It denied the plaintiff's motion for attorney's fees and costs. The plaintiff filed a motion to reargue, which the court denied. The plaintiff filed the present appeal on October 11, 2017.

         On August 16, 2017, the defendant filed a motion asking the court for an award of postjudgment interest. She later filed a memorandum of law in support of the motion. The plaintiff did not file a written objection or memorandum of law in opposition to the defendant's motion. The court heard argument on the defendant's motion on February 26, 2018. On June 11, 2018, the court issued a decision granting the defendant's motion and awarding postjudgment interest at an annual rate of 5 percent. The plaintiff amended the present appeal, challenging the postjudgment interest award. Because briefs already had been filed in the initial appeal, this court granted permission to file supplemental briefs addressing the issue in the amended appeal. See Practice Book § 61-9. Additional facts will be set forth as needed.

         I

         We begin with the plaintiff's claim that the court improperly found that he made material omissions on his financial affidavit in violation of the separation agreement by failing to disclose the Niagara account and Jerusalem property. The plaintiff essentially raises three arguments in support of this claim. First, heargues that, because the defendant knew about the Niagara account and the Jerusalem property at the time of the dissolution judgment, their nondisclosure on his financial affidavit would not have affected her decision-making process and, therefore, his failure to disclose those assets could not have constituted material omissions.[9]Second, he argues that his nondisclosure of the Niagara account and the Jerusalem property had no ‘‘real importance or cause[d] great consequences to the overall separation agreement of the parties'' and that the court overvalued those assets in determining whether their nondisclosure constituted material omissions. Third, the plaintiff argues that the court should not have found that his failure to disclose the Niagara account was a material omission because there was no evidence ...


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