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.
OPINION
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.
I
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]
A
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.''
B
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.
C
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 ...