James Burke v. Susan Burke (2009)

MEMORANDUM OF DECISION

The parties disagree in their interpretation of the alimony provisions of their separation agreement.   The defendant contends that the intention of the parties is to share the plaintiff's income equally.   The plaintiff contends that the intention of the parties is to equalize their incomes subject to a “safe harbor” for the defendant and a “cap” on the plaintiff's income.

FACTS

The marriage of the parties was dissolved on October 2, 2007.   A separation agreement was incorporated by reference into the dissolution judgment.   The separation agreement provides in relevant part:  “ARTICLE V:  ALIMONY

5.1 Commencing October 1, 2007, the HUSBAND shall pay to the WIFE, as alimony, during his lifetime, until her death, remarriage, cohabitation as defined in paragraph 5.4, or October 1, 2014, whichever event shall first occur, the sum of $75,432.00 per year, payable $6,286.00 per month, payable on the first of every month thereafter.   Said alimony amount was determined using the HUSBAND's current base salary of $228,230.00.   The parties agree to recalculate the alimony amount when there is a change of circumstance in either parties' income.   Notwithstanding the foregoing, the parties agree the first $55,000.00 the WIFE receives as gross earned income, not including alimony and child support, will be a ‘safe harbor’ and shall not ever at any time be considered in calculating the WIFE's net income for purposes of modifying the alimony and child support received by the WIFE. Similarly, the parties agree that any amount the HUSBAND earns over $300,000.00, including bonus income, shall not be subject to division.

5.2 In addition to the HUSBAND's support obligation as set forth in Section 5.1, the parties agree that the HUSBAND shall pay to the WIFE as additional periodic alimony, until her death, remarriage, or cohabitation as defined below in paragraph 5.4, or October 1, 2014, whichever event shall first occur, $9,252.00 from the HUSBAND's annual bonus, payable to the WIFE when paid to the HUSBAND.   Said alimony amount was determined using the HUSBAND's 2006 bonus of $22,823.00.   The amount paid to the WIFE from the Husband's bonus income shall be calculated and paid based solely on the Husband's gross bonus amount irrespective of how this payment might impact the equal payment set forth in paragraph 5.1.

5.3 It is the parties' intention that during the alimony term the parties shall share the Husband's base and bonus income equally on a net, after-tax basis.   The parties, therefore, agree that on an annual basis the alimony and child support shall be adjusted so that each party has the same net income ․”

On July 9, 2009, the defendant, Susan Burke, filed an amended post-judgment motion for contempt/motion to modify.   In her motion, she alleges that the plaintiff, James Burke, has failed to abide by certain provisions of the separation agreement.   Specifically, she alleges, inter alia, that the plaintiff has failed to adjust his alimony and child support payments on an annual basis to reflect changes in his income.   On July 9, 2009, the parties appeared before the court (Marano, J.) for a hearing on the post-judgment motion for contempt/motion to modify.   The parties indicated that, since this was solely a matter of interpretation of the agreement, no evidence was required.   The parties filed contemporaneous post-hearing briefs on August 4, 2009.   Judge Marano subsequently found that evidence would be required in order to rule on the motion.   An additional hearing was held on November 18, 2009 before the undersigned, at which time evidence was introduced.

DISCUSSION

“When a modification of alimony is requested on the basis of the separation agreement, the court must look to the agreement.   Separation agreements incorporated by reference into dissolution judgments are to be interpreted consistently with accepted principles governing contracts.”  (Internal quotation marks omitted.)  Cushman v. Cushman, 93 Conn.App. 186, 191, 888 A.2d 156 (2006).  “It is well established that [a] contract must be construed to effectuate the intent of the parties, which is determined from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction ․ [T]he intent of the parties is to be ascertained by a fair and reasonable construction of the written words and ․ the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the contract ․ Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms.   A court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity ․ Similarly, any ambiguity in a contract must emanate from the language used in the contract rather than from one party's subjective perception of the terms ․ [T]he mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous.”  (Internal quotation marks omitted.)   Celini v. Celini, 115 Conn.App. 371, 377, 973 A.2d 664 (2009).   However, “[i]f the language of the contract is susceptible to more than one reasonable interpretation, the contract is ambiguous.”  (Internal quotation marks omitted.)  Enviro Express, Inc. v. AIU Ins. Co., 279 Conn. 194, 199, 901 A.2d 666 (2006).  “When the language of a contract is ambiguous, the determination of the parties' intent is a question of fact.”  (Internal quotation marks omitted.)  O'Connor v. Waterbury, 286 Conn. 732, 743, 945 A.2d 936 (2008).

In the present case, both parties argue that the alimony provisions of the separation agreement are clear and unambiguous.   The defendant contends that the parties' intention, as expressly stated in section 5.3 of the separation agreement, is to share the plaintiff's base and bonus income equally on a net, after-tax basis.   She stresses that there is no reference to a cap in section 5.3.   The plaintiff asserts that the parties' intention is to equally divide their net, after-tax combined income subject to a “safe harbor” for the first $55,000 of gross income earned by the defendant and to a “cap” of $300,000 on the plaintiff's gross income.   He argues that the defendant's interpretation ignores the unambiguous language of section 5.1 of the separation agreement, thereby rendering it nugatory.

The plaintiff's interpretation is more reasonable than the defendant's as it gives effect to all the relevant provisions in the separation agreement.  “When interpreting a contract, [courts] construe the contract as a whole and all relevant provisions are considered when determining the intent of the parties ․ The law prefers an interpretation which gives effect to all parts of the contract rather than one which leaves a portion of the contract ineffective or meaningless.”  (Citation omitted;  internal quotation marks omitted.)  Hilb Rogal & Hobbs Co. v. Randall, 115 Conn.App. 89, 96, 971 A.2d 796 (2009).   Accordingly, in interpreting the separation agreement, the court cannot ignore the language in section 5.1, providing that “the first $55,000 the WIFE receives as gross earned income, not including alimony and child support, will be a ‘safe harbor’ and shall not ever at any time be considered in calculating the WIFE's net income for purposes of modifying the alimony and child support ․ [and] that any amount the HUSBAND earns over $300,000, including bonus income, shall not be subject to division.”   Nor can it ascertain the intent of the parties based solely on the language in section 5.3, stating that “[i]t is the parties' intention that during the alimony term the parties shall share the Husband's base and bonus income equally on a net, after-tax basis.”   Rather, in ascertaining the parties' intent, the court must consider and give effect to all of the relevant provisions of the separation agreement.

In doing so, the court finds that the intent of the parties is to equalize their net, after-tax incomes on an annual basis subject to the “safe harbor” and “cap” provided for in section 5.1 of the separation agreement.   If the intent of the parties was to merely share the plaintiff's income equally, there would be no reason for them to agree to “recalculate the alimony amount when there is a change of circumstance in either parties' income,” as they did in section 5.1 of the separation agreement.   Moreover, section 5.6 of the separation agreement specifically provides that the plaintiff can seek a downward modification of support once the defendant “is earning more than $55,000 gross annual income though employment, not including child support or alimony.”   Accordingly, the more reasonable interpretation is that the parties' intent is, as stated in section 5.3, “that on an annual basis the alimony and child support shall be adjusted so that each party has the same net income.”   In light of section 5.1, this “equalization” is subject to the defendant's “safe harbor” of $55,000 and the $300,000 “cap” on the plaintiff's income.

CONCLUSION

Based on the foregoing, it is found that the alimony provisions of the parties' separation agreement are unambiguous and that they should be given effect according to their terms.   That is, alimony and child support should be adjusted annually so the each party has the same net, after-tax income subject to a $55,000 “safe harbor” for the defendant and a $300,000 “cap” on the plaintiff's gross income, including bonus income.   The case is continued until January 7, 2010 for a hearing to determine, what if any, amounts are owing the defendant as a result of this decision and for any additional orders required concerning the motion for contempt.

Pinkus, J.

Pinkus, Barry C., J.