Thomas Cox v. Susan Cox
MEMORANDUM OF DECISION ON PLAINTIFF'S AMENDED POSTJUDGMENT MOTION FOR MODIFICATION OF ALIMONY DATED MAY 4, 2011 (# 185.00)
Due to the plaintiff's retirement, attaining the age of 65, reduction of income, and deterioration of health, he has moved to modify the original alimony order of $6,270 per month entered on November 5, 1999 pursuant to the parties' Separation Agreement. The plaintiff filed a Postjudgment Motion for Modification of Alimony dated August 6, 2008 (# 171.00). Motion # 171.00 was served on the defendant on August 13, 2009 pursuant to Gen.Stat. § 52–50. The Motion to Modify now before the court was amended on May 4, 2011. (# 185.00.) Both of these motions were heard by this court and are the subject of this single Memorandum of Decision. Neither counsel suggested a proposed dollar amount for any modified alimony order.
General Statutes § 46b–86 governs the modification or termination of an alimony or support order after the date of a dissolution judgment. When, as in this case, the disputed issue is alimony, the applicable provision of the statute is § 46b–86(a), which provides that a final order for alimony may be modified by the trial court upon a showing of a substantial change in the circumstances of either party ․ Under that statutory provision, the party seeking the modification bears the burden of demonstrating that such a change has occurred ․ Alimony decrees may only be modified upon proof that relevant circumstances have changed since the original decree was granted ․ In general the same sorts of [criteria] are relevant in deciding whether the decree may be modified as are relevant in making the initial award of alimony. They have chiefly to do with the needs and financial resources of the parties ․ To obtain a modification, the moving party must demonstrate that circumstances have changed since the last court order such that it would be unjust or inequitable to hold either party to it. Because the establishment of changed circumstances is a condition precedent to a party's relief, it is pertinent for the trial court to inquire as to what, if any, new circumstance warrants a modification of the existing order. In making such an inquiry, the trial court's discretion is essential. The power of the trial court to modify the existing order does not, however, include the power to retry issues already decided ․ or to allow the parties to use a motion to modify as an appeal ․ Rather, the trial court's discretion only includes the power to adapt the order to some distinct and definite change in the circumstances or conditions of the parties. (Citations omitted; internal quotation marks omitted.)
Borkowski v. Borkowski, 228 Conn. 729, 734–38 (1994).
Once a court determines that there is a substantial change in the circumstances of either party, the court then must consider the statutory criteria. “More specifically, these criteria, outlined in General Statutes § 46b–82 requires the court to consider the needs and financial resources of each of the parties.” Id., 736.
The defendant claims that the parties' November 5, 1999 Separation Agreement contains certain limitations on the plaintiff's ability to obtain modification of the alimony orders. “Unless and to the extent that the decree precludes modification, any final order for the periodic payment of permanent alimony ․ may, at any time thereafter, be continued, set aside, altered or modified by the court ․ By written agreement, stipulation or decision of the court, those items or circumstances that were contemplated and are not to be changed may be specified in the written agreement, stipulation or decision of the court.” Gen.Stat. § 46b–86(a).
The court finds the following facts and legal conclusions.
The parties were married in Norwich, Connecticut on November 18, 1967. This dissolution of marriage action was commenced on September 16, 1998. The parties had two children, issue of their marriage, both of whom had attained majority. The parties were both represented by counsel. They executed a November 5, 1999 Separation Agreement that was approved by the court and incorporated by reference into the November 5, 1999 decree of dissolution of marriage. The November 5, 1999 financial orders have not been modified. The parties' base financial affidavits as of November 5, 1999 were before this court. # 144.00 and # 145.00.
Article II, paragraph 2.1a of the November 5, 1999 Separation Agreement established that the plaintiff shall pay periodic alimony during his lifetime to the wife of $6,270 per month payable $3,135 on the 1st day of the each month and $3,135 on the 17th day of each month.
On November 5, 1999 the plaintiff was self-employed as a life insurance agent with Northwestern Mutual Life Insurance Company. His gross earnings were $25,000.78 per month from which monthly business expenses of $9,082.06 were paid. From that monthly net of $15,928.72 he paid federal and state income taxes, Social Security and medicare resulting in net monthly income of $9,829.51. This information has been obtained from his October 12, 1999 financial affidavit that was before the court on November 5, 1999 (# 144.00). Virtually his entire business career was spent as a life insurance agent/financial representative with Northwestern Mutual Life Insurance Company. His date of birth is July 11, 1945. He is now 66 years old.
On November 5, 1999 the defendant was not employed. Her November 5, 1999 financial affidavit listed as her only source of income court ordered alimony of $2,150 per month, less $379 for estimated taxes for a net monthly income of $1,771 (# 145.00). Her date of birth is January 28, 1945. She is now 66 years old. She is a college graduate and worked during the early years of the marriage as a school teacher, employment relations manager and as Director of Industrial Relations for Teledyne Corporation until 1981 when her division closed. She is currently employed part-time at Barnes and Noble retail store and earning $196.47 gross per week and $67.53 net per week. Her Barnes and Noble wages are largely reduced due to income taxes withheld on her alimony. Her true net income from Barnes and Noble was not ascertained at trial. The court therefore has estimated that the usual federal, state and other allowable deductions from her $196.47 gross would create a net weekly income from Barnes and Noble of $110.84. She receives $248.08 weekly from Social Security. The court assumes no taxes on the Social Security. In addition the plaintiff's alimony payments are reflected in her August 9, 2011 financial affidavit (# 187.00).
The court finds that the gross weekly income of the defendant is $444.55 and her net weekly income is $358.92. The court is not considering the plaintiff's alimony in determining the defendant's net weekly income. Her expenses per week are $1,257.41. There she has a shortfall between her expenses and her employment and social security income. That shortfall is $898.49 per week.
As of November 5, 1999 her assets were $8,500 including her one-half interest in the family home in Easton, Connecticut. That house was encumbered by three mortgages and a $100,000 IRS lien. The Easton home sold as required by the Separation Agreement. She received less than $10,000 from the Easton house sale. As of November 5, 1999 she had various loans she owed to friends and relatives for total liabilities of $34,000. She was relying on her permanent periodic alimony award to live out the remainder of her life.
As per her August 9, 2011 financial affidavit, she owns a Stratford, Connecticut condominium with a fair market value of $410,000 encumbered by a $370,000 mortgage for a net equity of $40,000. Her total assets including the condominium equity is $42,450. She lists as an unknown asset, alimony arreage due from the plaintiff. She lists over $81,000 in liabilities for credit cards and loans from family. She has high blood pressure and a number of other conditions. Her health conditions cause her to be short of breath after walking up stairs.
Comparing her current financial situation with that of November 5, 1999, the court finds that although her assets have slightly increased, her liabilities have greatly increased especially since 2009 when the regular alimony payments stopped. She still has a negative net worth. The court further finds that although she was unemployed in 1999 and had not had a job since 1981, her current employment at Barnes and Noble and her receipt of social security still fail to come close to meeting her expenses. Her condo mortgage is in arrears. She states: “I am surviving with great difficulty.” The court cannot find a substantial change of circumstances in the defendant's financial situation.
Most of the court's time on the five-day modification hearing was spent on the plaintiff's income as a life insurance agent/financial representative for Northwestern Mutual Life Insurance Company. Over one-third of this court's trial notes occurred during the testimony of the Director of Finance at J. Philip Bender and Associates Finance Group, a network office of Northwestern Mutual Life Insurance Company. As expressed a number of times during the hearing, this court finds the method of payments to agents of Northwestern Mutual Life Insurance to be exceedingly complex using terms that required detailed explanations and examples in order to even come to a basic understanding. The plaintiff's base financial affidavit dated October 12, 1999 did not contain a breakdown of how his “Gross Monthly Receipts” were calculated or how the “Business Expenses” were determined (# 144.00). The plaintiff's August 25, 2010 financial affidavit filed in support of his motion to modify did offer a hint of some of these calculations and terms (# 180.00). It contained deductions from weekly gross income of “bond/liability” $41.00, “office network deduct” $220; and “fed tax escrow” $213.
This hearing commenced on March 15, 2011 with the testimony of the Director of Finance. Her testimony continued on May 6, 2011. On that second day hearing date, the plaintiff filed a new financial affidavit dated May 5, 2011 (# 183.00). Attached to that financial affidavit was a three-page Addendum A. That Addendum A set forth various categories of income and expenses related to Northwestern Mutual Life Insurance Company. Included were the following: Postage Usage Recoveries, Copier Monthly Usage, Rent Recoveries, NAIFA Dues, Telephone Basic Charges, NM Commission, SET Monthly Charges, Long–Distance Rep Recoveries, Copier Basic Charges, HOSB Dec/2010, Technology Charges 2011, FR Escrow Accounts, Furniture Recoveries, CORE Commission, Tax Escrow and Postage Charges. This May 6, 2011 financial affidavit was then modified in court with ink changes. “Tax Escrow” was changed to “Tax Fed” and “Liability ins” was changed to “Bond/liability.” Most of the gross net income figures were ink changed. The entries for “Joint life pension” “$846.00” and “ARP Retirement” $75.00 found in the August 25, 2010 affidavit (# 180.00) were not in this May 5, 2011 financial affidavit (# 183.00). There was an entry entitled “Weekly Income from Pension” Gross Income $846. The net weekly income from that pension was $677.00 (# 183.00). The “Joint life pension $846.00” is one and the same as the Northwestern Mutual Life Insurance Company Joint Life Annuity $3,666.59 per month. Ex. 14
At the August 9, 2011 court hearing the plaintiff filed his last financial affidavit dated August 8, 2011. This was in manuscript form (# 188.00) as was the October 25, 1999 affidavit (# 144.00). The other two plaintiff's financial affidavits were filed using Form JD–FM–6 Rev. 1–08. This August 8, 2011 financial affidavit listed in detail in the first two pages, the various types of commissions: “Core, NMIS and SEBS,” the various types of retirement income: “Pension, Pension Trust and Deferred Compensation,” a Disability Insurance payment of $250 per week, Bond/Liability, and a listing of twenty Northwestern Mutual “Office Expenses/Business Expenses” for the period of January 2011 through April 2011 or July 2011.
The plaintiff's August 8, 2011 financial affidavit (# 188.00) states that his gross weekly income from commissions, disability insurance and retirement income is $2,363.92 ($1,134.92 commissions, $250.00 disability income and $979.00 retirement income). From these are deducted various weekly business expenses (Office Expenses $196.00 and Bond/Liability $13.75). Those twenty Northwestern Mutual Office Expenses/Business Expenses that total $5,148.46 are deducted on a weekly basis. The affidavit states that these are the Business Expenses from January 2011 through July 2011 and in another place “Total for Jan. thru April.” Then the affidavit divides the $5,148.46 total by 31 to obtain $166.00 per week for business expenses plus an additional $30.00 for Business Accounting Fees bringing the total to $196.00 per week. The court has added the twenty listed Business Expenses found on page two of the plaintiff's August 8, 2011 financial affidavit and finds that the total is correctly stated in the affidavit as $5,148.46. The court therefore will assume that this is the total for all the weeks from January 1, 2011 through and including July 31, 2011 since that page is headed: “Business Expenses for January through July.” That is 212 days, which is 30.285 weeks. Dividing the $5,148.46 by 30.285 the result is $170.00. The plaintiff used 31 weeks thus claiming a $166.00 per week deduction for these twenty listed Northwestern Mutual Business Expenses. The court will use the plaintiff's $196.00 per week. ($166.00 Business Expenses plus $30.00 Business Accounting Fees.) The August 8, 2011 affidavit then deducts federal tax from the three Commissions and the Gross Retirement Income. Further deductions for state taxes, FICA, and medical insurance are reflected. After taking all of the above deductions, the court finds that the plaintiff's gross weekly income is $2,363.92 and his net weekly income is $1,539.17 (# 188.00). The court notes that the plaintiff incorrectly added his Commission deductions to be $609.75. The correct amount is $616.75.
The plaintiff claims three substantial changes of circumstances in the original motion and the amended motion to modify: lower income, retirement and health. The base financial affidavit of October 12, 1999 lists net monthly income after all business expenses, taxes, medical insurance and social security at $9,829.51 per month. This is the equivalent to $2,868.35 per week. He retired on November 30, 2009. Ex. 22. His current status is a Senior Agent as of November 30, 2009. As a Senior Agent he can still sell insurance and receive commissions but he no longer has a sales quota or any production requirements. His office has been reduced to a cubicle. He no longer is eligible to receive Persistency Fees or Persistency bonuses. He still has to pay a portion of his business expenses to Northwestern Mutual Life for costs, bonding, and office overhead. He still sells individual life, group life; long-term care, individual and group disability insurance policies. He suffers from an immunity disorder and this requires infusion treatments every 21 days. This disorder and the treatments substantially affect his energy levels. He states that he is no longer sharp with numbers. He applied for and received disability insurance benefits for his health concerns on April 17, 2008. This $250 per week disability benefit terminates on October 16, 2011. Ex. 20 This reduces his net weekly income on a current basis to $1,289.17 ($1,539.17—$250.00 = $1,289.17).
The court finds from the above facts that the plaintiff has established a substantial change in his circumstances since the last court order of November 5, 1999.
The court now will review the Separation Agreement for any limitations contained therein that would preclude or limit the court's authority to modify the periodic alimony award. Gen.Stat. § 46b–86(a). Article XI, paragraph 11.1 states: “The HUSBAND shall not be entitled to any modification or reduction of his alimony and support obligations as provided in this Agreement by reason of any employment of the WIFE.” The plaintiff's motions do not refer to the wife's income as a substantial change of circumstances. The court has found that the wife's income is not a substantial change of circumstances, regardless of this preclusive paragraph. Paragraph 11.1 does not preclude the court from considering the wife's income for modification purposes, provided a substantial change of circumstances has been shown elsewhere. The statutory modification procedures require the court to consider all of the parties' current finances once a substantial change of circumstances has been found. Gen.Stat. §§ 46b–82(a), 46b–86(c); Cushman v. Cushman, 93 Conn.App. 186, 192 (2006). The Separation Agreement in paragraph 11.1 only precludes the consideration of the wife's income from being a substantial change of circumstances. The Separation Agreement does not state that the wife's income cannot be considered, after a substantial change of circumstances has been found, under the court's duty to consider both parties' current financial situation. The parties could have placed such a restriction in the Separation Agreement. Gen.Stat. § 46b–86(a) “ ․ and are not to be changed ․” “Separation agreements incorporated by reference into dissolution judgments are to be interpreted consistently with accepted principles governing contracts.” Kremenitzer v. Kremenitzer, 81 Conn.App. 135, 139 (2004).
Article XI paragraph 11.2 states that if the husband's employment income is increased “above the amount shown on the financial affidavit to be filed with the court in connection with these pending proceedings, the amount of such increased income shall not be deemed to be a substantial change in circumstances of the HUSBAND.” This event has not occurred and no party has claimed that this event has occurred.
Article XI, paragraph 11.3 states: “In the event the HUSBAND's annual income as hereafter defined is less than $160,000.00, the HUSBAND shall have the right to petition for a modification of the provisions of this Agreement or any decree rendered thereon.” To determine if his income is less than $160,000 paragraph 11.4 must be considered. In paragraph 11.4 “annual income” is defined as “the adjusted gross income which appears on Line 33 of the 1998 U.S. Individual Income Tax return.” No such income tax returns were offered in evidence. No blank 1998 U.S. Individual Income Tax returns were offered in evidence so the court would have difficulty determining, what categories of “adjusted gross income” would be currently relevant. The Separation Agreement also excluded from the husband's income capital gains, the tax effect of the alimony deductions, income tax refunds, distributions from retirement plans, and any social security payments. None of the plaintiff's financial affidavits filed in support of modification nor any facts or documents in evidence disclose any capital gains, tax effect of the alimony deductions, income tax refunds, or social security payments. His financial affidavit discloses three forms of retirement income. Even if the gross income from the three retirement sources of $979.00 per week were included the plaintiff's gross income as shown on his August 8, 2011 financial affidavit the $160,000 threshold contained in Article XI paragraph 11.3 would not be exceeded. ($1,134.92 + $979.00 + $250.00 = $2,363.92 x 52 weeks = $122,923.84 per year). Paragraph 11.3 read in conjunction with paragraph 11.4 permits the plaintiff to seek a modification.
The defendant does not argue that the $160,000 threshold has not been met. The plaintiff is the party invoking paragraph 11.3. The plaintiff claims that the three retirements payments must be excluded from this court's consideration both as to determining if the $160,000 threshold has been met and thereafter when the court considers the parties' entire current financial situation. The plaintiff cites the language of paragraph 11.3. Paragraph 11.3 contains two sentences. Once the determination of “annual income” is made using the exclusions contained in paragraph 11.4 the second sentence of paragraph 11.3 comes into play. That second sentence of paragraph 11.3 states: “The court shall then consider all relevant factors including the parties' income, assets, expenses, reasonable needs of the parties, HUSBAND'S obligations under this Agreement, and the benefits received by the WIFE pursuant to the terms of this Agreement and the application by the WIFE of all funds and assets received under the terms of this Agreement and their use and application by her.” Nowhere is that second sentence is the phrase “annual income.” Nowhere is that second sentence is the limitation of income as defined in paragraph 11.4 referred to. In fact the phrase used in the second sentence is not “annual income” but “including the parties' income.” This language is consistent with the statutory modification of alimony procedures, that once a substantial change of circumstances is found then the parties' current entire financial situation is before the court and must be considered. The parties could have limited the use of the husband's pension or retirement income from consideration in any alimony modification both as to “substantial change of circumstances,” establishing an income threshold and in removing certain types of income from the consideration of the parties' overall financial condition. They did not do so. Gen.Stat. § 46b–86(a) permits such limitation: “ ․ those items or circumstances that were contemplated and are not to be changed may be specified in the written agreement, stipulation or decision of the court.”
Article XI. paragraph 11.6 states: “The parties agree that upon the HUSBAND'S retirement, or any time after he attains the age of 65, whichever event shall first occur, the HUSBAND may request that the court take a ‘second look’ at his alimony obligation.” Various procedural terms follow in paragraph 11.6. A second look using this language has been defined as a de novo examination of the parties' entire financial circumstances as of that future date. Generally a motion must be filed to invoke this “second look.” Cushman v. Cushman, 93 Conn.App. 186, 188–89 (2006); Taylor v. Taylor, 117 Conn.App. 229, 233–34 (2009).
The plaintiff has properly filed this motion to modify under this “second look” provision, which by its terms, eliminates the need for this court to determine if there is a substantial change in circumstances. The motion inartfully fails to cite paragraph 11.6 or refer to the “second look” provision. The substance of the plaintiff's motion, his retirement and age over 65, all compel this court to treat both motions as invoking this “second look” provision. Taylor v. Taylor, supra, 117 Conn.App. 234 (“The parties agreed that once the plaintiff became sixty-five or the defendant's father died, those circumstances in and of themselves would trigger a second look at the alimony order. We conclude, therefore, that the court correctly determined that it did not need to find a substantial change of circumstances and properly conducted a de novo review”).
The plaintiff advances the legal argument that the court's consideration of the plaintiff's income from the three retirement plans would be “double dipping” since those assets were equitably divided in the November 5, 1999 decree. The plaintiff has furnished no memorandum on the subject and only cites Krafick v. Krafick, 234 Conn. 783 (1995). At the time of the decree the plaintiff had two retirement type assets: “Agent's Retirement Plan” valued as “undetermined” and “Persistency Fee Guaranty Fund” valued at $209,292.12 (# 144.00). The defendant's November 5, 1999 financial affidavit did not reflect any other retirement plan as an asset (# 145.00). The plaintiff's affidavit stated as to the Agent's Retirement Plan: “This is a defined benefit plan. At retirement the Plaintiff will collect $37,276.15 currently ($34,494.24 as Qualified funds and $2,781.90 as Non–Qualified funds).” As to the Persistency Fee Guaranty Fund, the affidavit stated: “This is a Deferred Contribution Plan.” None of the twenty-five listed Business Expenses or his personal expenses included current contributions being made to either of these plans. No other retirement, deferred compensation or pension plan was before the court on November 5, 1999. The assets and their valuation must be determined at the time the judgment of dissolution is rendered. Sunbury v. Sunbury, 216 Conn. 673, 676 (1990).
As already stated, the Change in Circumstances, Article XI of the Separation Agreement, excluded “Any distribution from retirement plans” only for the purpose of calculating the $160,000 annual income threshold in paragraph 11.3. It did not exclude income from retirement plans from being considered thereafter in any future motion for modification of periodic alimony. Marsico v. Marsico, 195 Conn. 491, 493 (1985).
Article IX, paragraph # 11.6 did not exclude the consideration of income from retirement plans in any future “second look” hearing. The Separation Agreement did state in paragraph 11.6 c); “In addition to any other factors, the court should expressly consider the asset distribution which occurred at the time of the dissolution, including the division of the retirement assets.”
The two retirement plans were divided between the parties as follows: The entire Agent's Retirement Plan became the plaintiff's property in paragraph 6.7. The entire Persistency Fee Guaranty Fund became the defendant's property in paragraph 6.8. Although the defendant's financial affidavit referred to that asset as “Persistency Fee Guaranty Fund $209,292.12” as a defined contribution plan and the Separation Agreement referred to that asset as “Persistency Guarantee Fund $216,000” as a certain savings plan/defined retirement plan with a valuation of $209,292.12/$216,000, they are typos and refer to the same asset. The transfer of the Persistency Fee Guaranty Fund, the only significant asset of the parties, to the defendant occurred by way of a QDRO as stated in paragraph 6.9. The QDRO ordered the Plan Administrator to make a single sum cash payment of the Northwestern Mutual Life Insurance Company Agents Persistency Fee Guarantee Fund at 100% of that fund to the defendant, wife, as the Alternate Payee. The QDRO became a court order (# 154.00).
The plaintiff's August 25, 2010 financial affidavit refers to three retirement type funds: (1) weekly income from joint life pension $846.00 (2) ARP Retirement $75.00 and (3) Deferred Comp $19,000/$79,000 in the listing of assets. The court assumes the $79,000 was a typo and was intended to be $19,000. The defendant's May 5, 2011 financial affidavit refers to two retirement type funds: (1) weekly income from Pension $846.00 and (2) Deferred Comp $19,000/$19,000. The ARP Retirement fund and the remaining $60,000 of the Deferred Comp was missing from the May 5, 2011 financial affidavit. The plaintiff's August 8, 2011 financial affidavit lists three retirement type funds in a slightly different fashion; (1) Pension $846.00, (2) Pension Trust $78.00 and (3) Deferred Compensation $55.00 as income and Deferred Compensation $19,000 as an asset.
No supporting documents for any of the retirement type funds are contained in the file from November 5, 1999 or were offered in evidence at the modification hearing.
The defendant liquidated the Persistency Fee Guaranty Fund asset. She acquired her condominium with the funds, paid income taxes and paid attorney fees. Ex. 24. She no longer has the Persistency Fee Guaranty Fund as an asset.
From this evidence the court finds that as of November 5, 1999 the plaintiff no longer had a Persistency Fee Guaranty Fund. He thereafter started a new Persistency Fee Guaranty Fund. He cashed in that new Persistency Fee Guaranty Fund years ago. On November 5, 1999 the plaintiff had an Agent's Retirement Plan that would have paid him in excess of $37,000 annually at his retirement. The plan is still in existence but only pays him $3,900 per year. The third retirement plan referred to as “Pension $846” in his current financial affidavit was not an asset in November 5, 1999 and was not divided among the parties at the dissolution. The defendant and/or Northwestern Mutual made all of these contributions to that Pension after November 5, 1999.
The plaintiff has failed to furnish to this court sufficient evidence that a retirement asset conveyed to the defendant at the dissolution as a division of property is now being considered as the major source of income for the purpose of paying periodic alimony.
We reject the defendant's contention that to consider vested benefits for purposes of equitable distribution and also, as allocated, as a source of alimony constitutes impermissible “double dipping.” Our alimony statute expressly provides that “in determining whether alimony shall be awarded, and the duration and amount of the award, the court ․ shall consider ․ the award, if any, which the court may make pursuant to section 46b–81.” General Statutes § 46b–82. Relying on the pension benefits allocated to the employee spouse under § 46b–81 as a source of alimony would be improper only to the extent that any portion of the pension assigned to the nonemployee spouse was counted in determining the employee spouse's resources for purposes of alimony. See Majauskas v. Majauskas, supra, 61 N.Y.2d 492–93.
Krafick v. Krafick, 234 Conn. 783, 804–05, fn. 26 (1995).
The court rejects the plaintiff's double dipping argument because it has no support in the facts before this court and in the law. This result is buttressed by Parri v. Parri, Superior Court, judicial district of New Haven at New Haven, Docket Number FA 89–0291374 S (February 23, 1998, Munro, J.); Utz v. Utz, 112 Conn.App. 631, 639–40 (2009).
This court has carefully reviewed the testimony of the Director of Finance and the plaintiff and has examined the documents in evidence relating to the plaintiff's income and business expenses from Northwestern Mutual Life Insurance Company. The court made numerous inquiries of witnesses for clarification during the evidentiary hearing. The court has performed mathematical calculations of the three types of commissions set forth in the plaintiff's August 8, 2011 financial affidavit (# 188.00) (Core, NMIS and SEBS) and compared that with the exhibits supporting these commissions. The court concludes that the plaintiff's August 8, 2011 financial affidavit accurately reflects his current commission income.
The plaintiff's total assets as of November 5, 1999 including his interest in the Easton family home was $244,486.52. The largest asset was $209,292.12, Persistency Fee Guaranty Fund. The Persistency Fee Guaranty Fund was conveyed to the defendant by the decree and QDRO (# 154.00). His current affidavit lists assets of $19,000. On November 5, 1999 he had $134,486 in liabilities. He had a positive net worth in November 1999. His current affidavit lists liabilities of $31,798. He has a negative net worth. The plaintiff's two significant assets are “Deferred Compensation $19,000” and “Northwestern Renewals (contingent) undetermined.” The Deferred Compensation is also reflected as a source of income on the first page of his affidavit at $55.00 per week ($2,860 per year). The Northwestern Renewals (contingent) contains an undetermined value. Case law states that “undetermined” is the equivalent to zero. O'Bymachow v. O'Bymachow, 12 Conn.App. 113, 118–19 (1987). The evidence in this case belies that zero valuation. These are premiums for policies already sold by the plaintiff. Each year he receives a portion of these premiums in an ever decreasing sum. The premiums end at ten years, the insured's cancellation of the policy or the insured premium non payment. Ex. 10, Ex. 12, Ex. 15. They are truly contingent and incapable of exact measurement. The Renewals are also in pay status listed as “Commissions” in the affidavit's first page. Therefore the plaintiff has correctly stated the in pay status of these two assets on the income side of his financial affidavit. The plaintiff has remarried. Neither party argued the effect of Gen.Stat. § 46b–86(b), commonly referred to as the cohabitation statute. The plaintiff was the only party seeking a modification of the periodic alimony order. The defendant was “the party receiving the periodic alimony.” Gen.Stat. § 46b–86(b) has no relevance to this motion. The plaintiff's wife did not testify. There was little evidence concerning her income, sources of income or earning capacity. No documents were offered as to the plaintiff's wife's financial condition other than the joint 2010 income tax return. The plaintiff did testify that he allocated the expenses in his August 8, 2011 financial affidavit to reflect what he believed were the costs incurred solely for him and not for his wife. His weekly expenses reflected in his August 8, 2011 financial affidavit were $1,302, which is greater than his net weekly income in that affidavit of $1,289.17.
There are three documents in evidence relating to Valerie Cox, the plaintiff's current wife. In the plaintiff's Northwestern Mutual Life Insurance retirement statement dated November 30, 2009 states that the plaintiff is married and his spouse is 56 years 10 months old. Ex. 22. Valerie Cox is a financial representative for Northwestern Mutual Life Insurance Company employed full time. He is insured under her medical insurance policy. His August 25, 2010 financial affidavit lists no deductions for medical type coverage other than $32 per week medicare. Likewise his May 5, 2011 financial affidavit only lists as a medical type deduction $14.00 per week for medicare. No explanation was given for this reduction. His current affidavit dated August 8, 2011 lists $14.00 per week for medicare and for the first time $119.00 per week for “Medical Insurance.” No further information or documentation was offered why the plaintiff is taking a medical insurance deduction of $6,188 per year, when his wife has the medical insurance coverage. No allocation of the total Thomas Cox/Valerie Cox medical insurance premium was furnished to justify this $6,188 deduction.
Valerie Cox is listed as the member of the Northwestern Mutual Life Medical plan. Ex. 18. This statement reflects over $10,000 in medical and pharmaceutical bills for his immunity disorder. The premium is not shown on Ex. 18. It is a family plan.
In 2009 Thomas Cox filed his federal income tax married filing separately. Ex. 21. That 2009 tax return stated that his spouse was Valerie S. Cox. None of the information in the 2009 income tax return related to Valerie S. Cox.
In 2010 the plaintiff and Valerie S. Cox filed a joint federal income tax return. Ex. 26. The contents of this income tax return were not examined in detail in testimony. Therefore it is difficult to cull out what portions relate to Valerie S. Cox. The Social Security benefits and alimony paid relate only to the plaintiff. The only amount taken for medical insurance was $663 for self-employed health insurance. Valerie S. Cox owns rental real estate at 43 Harbor Drive, Stamford, Connecticut. Thus all expenses relating to real estate are attributable to her. The plaintiff and his wife live at 8 Ward Lane, Darien, Connecticut and pay rent. They do not own 8 Ward Lane. She pays $6,890 real estate taxes and $24,123 interest on the mortgage. She earns gross annual income of $40,823 from financial services and $17,772 from insurance sales. Her business expenses were $12,108. She was also a part-time real estate broker with gross income of $5,252. Her expenses exceeded her real estate income. She received $2,800 gross rent for the 43 Harbor Drive rental and incurred other expenses of $1,096. The real estate taxes and mortgage interest related to 43 Harbor Drive. Assuming 43 Harbor Drive was rented year round, the 2010 income tax return seems to indicate that no cash profit would be earned from that real estate rental. She owns a Mercedes automobile of unknown age, mileage, model or condition. She has a Bank of Montreal account in Canada. Her TD–F–90–221 form contains a requirement of stating the maximum value of the foreign bank account during the calendar year. She stated the value: “Value Unknown.”
His December 21, 2009 Commission statement shows “Year to Date Medical Plan $2,662.00. Current .00.” Therefore the plaintiff no longer paid medical premiums after December 2009. Ex. 10. The court will therefore add back into his net earnings a portion of the $6,188 ($119.00 per week) deduction from his income. $2,662 appears to be the last such medical premium paid by the plaintiff annually. That is $51.00 per week. Therefore the court will add to the weekly net income of the plaintiff the sum of $68.00 ($119.00—$51.00 = $68.00). This brings the plaintiff's net income before the Social Security income increases in 2012 and after the disability insurance terminated on October 17, 2011 to $1,357.17 ($1,289.17 + $68.00 = $1,357.17).
Valerie S. Cox paid for three out of state vacations the plaintiff took. The plaintiff does not list any expenses for travel or vacation. No additions to the plaintiff's income will occur as a result of these vacations. The plaintiff testified that they share the rental expenses equally including utilities. No evidence to the contrary was shown. No adjustment will be made for shelter. The $194 per week Life Insurance expenses includes both life insurance premiums for the $250,000 policy required in the decree, an additional policy and a long-term insurance policy. No adjustments will be made for the $194 week life insurance expenses.
The plaintiff has sustained his burden of proof of a substantial change of circumstances. The plaintiff has sustained his burden of proof that the order of periodic alimony must be modified based on a review of both parties' financial circumstances. The Amended Motion for Modification (# 185.00) and the original Motion for Modification (# 171.00) are granted.
After considering all the statutory factors set forth in Gen.Stat. § 46b–82 as to alimony, Gen.Stat. § 46b–86 as to modification of alimony, applicable case law, as well as the evidence, testimony, claims of law and claims of fact presented herein, the court hereby enters the following orders:
1. The plaintiff shall pay to the defendant as periodic alimony $2,500 per month; $1,250 payable on the first day of the month and $1,250 payable on the 17th day of the month.
2. On August 1, 2012 Social Security benefits will commence paying to the plaintiff $2,100 per month. Ex. 13. Effective September 1, 2012 the periodic alimony shall increase to $3,500 per month: $1,750 payable on the first day of the month and, $1,750 payable on the 17th day of the month.
3. A wage execution shall continue as ordered on July 30, 2011 modified as to the above amounts (# 165.00).
4. The parties filed a Postjudgment Stipulation (# 176.00). The Stipulation stated: “The parties agree that in the event that the Court orders that the alimony order currently in place be reduced or eliminated, such orders shall be retroactive to the original Court date, December 1, 2009.” This Stipulation became a court order on January 19, 2010. The court therefore orders that the modified periodic alimony order is retroactive to December 1, 2009.
5. The court reserves continuous jurisdiction to determine any issues regarding start up adjustments of this modified alimony order and matters related thereto.
BY THE COURT
Hon. Kevin Tierney
Judge Trial Referee
Tierney, Kevin, J.T.R.