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Puff v. Puff

Supreme Court of Connecticut

January 14, 2020


          Argued February 19, 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, Grogins, J., rendered judgment dissolving the marriage and granting certain other relief in accordance with the parties' separation agreement; thereafter, the court, Emons, J., granted the plaintiff's motion for modification of alimony; subsequently, the court, Emons, J., granted the plaintiff's motion to open; thereafter, the court, Heller, J., issued certain orders in accordance with the parties' stipulation; subsequently, the court, Heller, J., denied the plaintiff's motion to reargue or reconsider, and the plaintiff appealed to the Appellate Court; thereafter, the court, Tindill, J., granted the defendant's motion for sanctions and for contempt, and the plaintiff filed an amended appeal with the Appellate Court, DiPentima, C. J., and Beach and Bishop, Js., which reversed the trial court's judgment only as to the finding of contempt and remanded the case with direction to deny the motion for contempt, and the defendant, on the granting of certification, appealed to this court. Affirmed in part; reversed in part; further proceedings.

          Edward M. Kweskin, with whom, on the brief, was Sarah Gleason, for the appellant (defendant).

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

          Robinson, C. J., and McDonald, D'Auria, Mullins, Kahn and Ecker, Js.


          McDONALD, J.

         This post dissolution matter stems from the parties' oral stipulation following a motion for modification of alimony, the trial court's adoption of that stipulation as a court order, and subsequent litigation efforts by the defendant, Gregory Puff, on one hand, to carry the order into effect, and by the plaintiff, Claudia Puff, on the other hand, to challenge the order. At issue is the trial court's decision granting the defendant's motion for sanctions and for contempt and awarding him more than $169, 000 in attorney's fees and expert fees, i.e., all the litigation expenses he had incurred following the entry of the order adopting the stipulation. In his certified appeal, the defendant challenges the Appellate Court's judgment reversing the judgment of contempt. See Puff v. Puff, 177 Conn.App. 103, 129, 171 A.3d 1076 (2017). He contends that the award was based on a broader course of conduct than the one part of the order considered by the Appellate Court and that the trial court's award was proper. On the basis of the trial court's articulation ordered by this court, we conclude that, insofar as the award is based on contempt, it cannot stand on any of the grounds articulated by the trial court. Insofar as the award is based on litigation misconduct, it lacks the requisite findings. We therefore affirm the Appellate Court's judgment but direct that court to remand the case to the trial court for further proceedings on the defendant's motion for sanctions for litigation misconduct.


         The record reveals the following facts, either found by the trial court or otherwise undisputed. The parties' fourteen year marriage was dissolved in 2002. The judgment of dissolution incorporated a separation agreement, under which the defendant was obligated to pay periodic alimony of $5900 per month for a period of ten years, plus biannual payments totaling an additional $10, 000 for that same period.[1] In 2009, three years before those obligations were to terminate, the plaintiff filed a motion seeking to modify the alimony related orders. The grounds alleged for the modification were an increase in the defendant's income and the plaintiff's deteriorating health due to a recent diagnosis of a serious medical issue. The trial court, Emons, J., granted the motion, increasing the monthly alimony to $6100 and extending the duration of those payments to February, 2016, with both the amount and the duration not subject to further modification. Weeks after that decision was issued, the plaintiff filed a motion to open and vacate the judgment on the ground that the defendant had not disclosed to the court an imminent offer of employment at considerably higher compensation, which became final days after the modification was ordered. The court granted the motion in April, 2013, opening the judgment for the purpose of hearing new evidence.[2]


         Entry of an Oral Stipulation as a Court Order

         In February, 2014, the parties and their counsel appeared before the court, requesting to put an oral stipulation on the record that they had negotiated. The defendant was represented by Edward M. Kweskin, and the plaintiff was represented by Norman Roberts. Kweskin made prefatory remarks about the agreement before stating the particulars on the record. He stated that it was the parties' intention to have the court enter the stipulation as an order if the court were to approve it. He explained that this process was intended to confirm the terms on which the parties had agreed before the defendant returned to his foreign residence. Kweskin stated that the parties' intention was to distill the agreement into writing, after experts had been consulted on certain mechanics of the agreement still to be determined, and to have any disputes about the writing brought to the court for resolution consistent with the oral stipulation. He made clear, however, that the parties intended for the stipulation to be an enforceable order that was not conditioned on the execution of the written agreement.

         Kweskin then recited the twelve paragraphs that comprised the stipulation, while Roberts weighed in with any clarifications that he thought necessary. The principal substantive terms of the stipulation were as follows. The defendant was required to pay, along with certain other obligations, $10, 000 per month for a period of ten years, as alimony taxable to the plaintiff and tax deductible by the defendant. The plaintiff had the right to assign those payments to a special needs trust.[3] The defendant would be made a residual beneficiary of the trust, in the same proportion to the payments that he had made to the trust. In order for the defendant to be secure in his right to a tax deduction under present law or in the event of changes to the law, should any tax deduction be disallowed, he had the right to recoup from the trust the value of that deduction and any penalties assessed if sufficient offsets could not be made from pending payment obligations to the plaintiff.

         The defendant also was obligated to make a specific contribution toward the attorney's fees of a designated special needs trust attorney. His counsel had the right to review the terms of the trust before it was executed by the plaintiff to ensure that the trust conformed to the terms of the oral stipulation.

         The stipulation obligated the plaintiff to ‘‘immediately . . . secure or endeavor to secure a legal opinion that the deductibility by the defendant of the alimony is not impacted by any action taken by the plaintiff to assign the alimony to the trust.'' Counsel acknowledged that the mechanics of transferring the alimony by means that would ensure the deduction had not yet been determined, but the stipulation further provided that, ‘‘in order to accomplish the deductibility . . . the parties, through counsel, will work in good faith to achieve [that method], with the result that the defendant shall have the right [under federal tax law] to deduct the alimony . . . .''

         Roberts informed the court that he had been told that the tax deduction would not be a problem and that they were in the process of getting an opinion letter. Roberts explained that ‘‘the linchpin of this whole deal is that [the defendant] wants the income tax deduction on the $10, 000 a month . . . and that [the plaintiff] wants to actually receive the $10, 000 a month. You can imagine that the delta between those two things, given what the financial affidavits look like, is somewhere in the neighborhood of 40, 45 percent. So it's really, really important to each of these people to have the tax treatment that we believe, and have both been advised, exists. In order [to] sign off on paragraph 10 [allowing the defendant to recoup disallowed deductions and penalties], [the plaintiff], in an, I don't even think it's abundance of caution, just some, in prudent practice, is going to get an opinion letter from a special needs and a tax person, who will opine that, yes, [the defendant's] deductibility is not impacted at all by the scheme that we contemplate.'' (Emphasis added.) Just before Kweskin put the recoupment, or safety net, provision on the record, Roberts stated that this provision ‘‘is the reason that we are going to need the opinion letter before this can be done.'' (Emphasis added.)

         After the stipulation was read into the record, the court canvassed the parties. It inquired whether their counsel had discussed the terms of the stipulation with them, whether they understood the terms, and whether they agreed that the terms were fair and equitable. The parties gave affirmative responses to each question. The plaintiff asked only one question, obtaining confirmation that she would be receiving $10, 000 per month for ten years. The court then approved and ordered the stipulation. The court suggested that the parties ‘‘probably should have the full agreement with the terms of the trust . . . also so ordered by the court.''


         The Defendant's Motion for Order and the Plaintiff's Objection Thereto

         In April, 2014, approximately two months after this order was entered, Roberts sought permission to withdraw as the plaintiff's counsel, which the court granted the following month. In May, 2014, the defendant filed a motion for order, asking the court to approve a written embodiment of the oral stipulation prepared by his counsel, a copy of which had been provided to the plaintiff on that date. The day before a June hearing on the motion, the plaintiff, through new counsel, Amy J. Greenberg, filed an objection. Although the objection addressed the defendant's proposed draft, asserting that it contained certain additions or omissions that rendered it nonconforming to the oral stipulation, its principal thrust was numerous arguments as to why the stipulation itself was not binding or could not be enforced. The plaintiff claimed that, unbeknownst to the parties when they drafted the stipulation, it was impossible either to create a legally valid special needs trust or to afford the defendant a tax deduction for the alimony under the terms of the stipulation.[4] She further contended that the stipulation was too ambiguous and contained too many unknowns to result in an enforceable agreement, that these uncertainties precluded the parties' knowing consent, that the terms were uncon-scionable, [5] and that the canvass of the plaintiff had been insufficient. The plaintiff asserted that the defendant's motion for order should be denied and that the stipulation should be vacated.

         The trial court held a hearing on the defendant's motion for order in June, 2014. Greenberg argued, among other things, that viability of the stipulation was dependent on the availability of the tax deduction and that, after the oral stipulation was made, Roberts had obtained an expert opinion from an accountant that the alimony would not be deductible under the oral stipulation's terms. In response to Kweskin's claim that he had never seen this opinion, Greenberg countered that Kweskin had been made aware of it, claiming that Roberts' records reflected communications between counsel regarding the opinion and whether the defendant would be willing to forgo the residuary benefit to save the tax deduction. The court declined to address this matter, concluding that it was probably necessary to address the issues before the court in two steps, first determining whether the defendant's written stipulation accurately reflected the oral stipulation and then considering arguments as to why the agreement could not be carried out. The court acknowledged that the plaintiff's objection had included arguments as to discrepancies between the oral stipulation and the defendant's written stipulation and indicated that those concerns would be considered. The court scheduled another hearing on the matter for a later date.


         The Plaintiff's Motion To Open and Vacate the February, 2014 Order

         The day after the June hearing, the plaintiff filed a motion to open and vacate the February, 2014 order approving the oral stipulation. The grounds for the motion mirrored those enumerated in her objection to the defendant's motion for order, including mutual mistake and impossibility. One difference was that the motion to open acknowledged the parties' expectation that they would receive an ‘‘opinion from a tax expert'' that the defendant's ability to deduct the payments would not be impacted by the scheme that they contemplated, and asserted that such expert-identified as certified public accountant Ryan C. Sheppard-had determined that the payments would not be deductible under the stipulation's terms.

         The defendant objected to the motion to open and vacate on procedural and substantive grounds. He claimed that the motion was defective because it was not accompanied by a memorandum of law in violation of the rules of practice.[6] He also claimed that the plaintiff's ‘‘scatter shot challenge'' sought to undo a carefully reviewed agreement to which she had consented in an effort to renegotiate terms more favorable to her. He further asserted that, if, as the plaintiff contended, the agreement contains a provision benefitting him that jeopardized creation of a valid special needs trust; see footnote 4 of this opinion; it was within the defendant's power to waive that provision in order to eliminate any infirmity.

         The parties appeared again before the court for an August, 2014 hearing. The defendant submitted to the court a revised draft memorializing the oral stipulation, aimed at addressing the plaintiff's earlier objections. The plaintiff argued that the court should not sign off on the draft because the terms are unenforceable under the law for the reasons set forth in her objection and motion to open, and because the draft did not incorporate the terms of the special needs trust. She further argued that the defendant's draft did not include a critical term-Roberts' statement that the plaintiff would not sign off on the agreement if the expert's opinion did not confirm the expectations of the parties. Because these expectations could not be fulfilled, there was no agreement, according to the plaintiff. In response, the court stated: ‘‘I think [that] what the parties believed at the time may not be what they believe today.'' The court explained that it first would turn the stipulation into a written order and then would deal with any purported problems in carrying out that order. The plaintiff reiterated concerns about two matters omitted from the defendant's draft, which the court agreed to consider.

         Another hearing was scheduled for November, 2014. Shortly before that hearing, each of the parties disclosed a special needs tax attorney as an expert witness who would offer an opinion in support of their respective views as to whether a legally valid trust, rendering the alimony payments tax deductible to the defendant, could be created under the terms of the oral stipulation. The plaintiff filed a motion in limine seeking to preclude the defendant's expert from offering such an opinion predicated on adding or deleting terms to the oral stipulation. At this time, the plaintiff also filed a memorandum of law in support of her motion to open, which the defendant objected to on the grounds that it was untimely and a ‘‘sham'' that merely mirrored her motion. See footnote 6 of this opinion.

         At the November, 2014 hearing, both parties had their expert witnesses present. At the commencement of the hearing, the court, apparently unexpectedly, presented the parties with a ‘‘Memorandum of Decision on Post-judgment Motions Resolved by Stipulation Approved and So Ordered on February 19, 2014, '' which distilled the oral stipulation into writing.[7] The court announced that the decision was intended to resolve the defendant's motion for order. The plaintiff objected that the decision did not reflect Roberts' uncontested statement setting forth a ‘‘condition precedent, '' namely, that, if they were unable to obtain an opinion confirming the linchpin of the agreement-that the defendant would get the deduction and the plaintiff would get the contemplated payments-the plaintiff would not ...

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