Theresa Hines v. David Hines (2009)

MEMORANDUM OF DECISION RE PLAINTIFF'S MOTION FOR PAYMENT, MOTION NO. 144

This matter involves a post-judgment dispute between the parties which concerns an alimony adjustment payment for 2007 that was agreed to by the plaintiff and the defendant at the time their marriage was dissolved.

The plaintiff has filed a Motion for Payment (Motion No. 144).   A contested hearing on the motion was field before the undersigned on January 6, 2009, and February 17, 2009.   After the hearing concluded, the plaintiff filed a Motion to Reopen Evidence in this case.   That motion was denied in August.   Both parties appeared at the hearing and were represented by their counsel.   The court has carefully considered all of the evidence that was presented at hearing as well as the thoughtful and instructive arguments and post-trial memoranda of counsel.

The following procedural history is pertinent to this matter:

The parties' marriage was dissolved on March 28, 2007.   On the date of judgment, the parties submitted a document entitled “Divorce Settlement or Agreement” to the court.   The agreement was signed by both the plaintiff and the defendant and their attorneys.   The court, Simon, J., incorporated all of the terms of the Settlement Agreement as its orders in the judgment of dissolution.

Paragraph 3 of the judgment pertains to Child Support.   It states as follows:

Child Support.   Husband shall, during his lifetime, pay the Wife $2,756.00 per month as child support for both children.   The payment is a deviation from the Child Support Guidelines because of the substantial assets of the parties, the high income of the Husband beyond the Guidelines chart, and other equitable factors.   This amount is the maximum on the chart for the Child Support Guidelines (2005) for two children.   The Husband's obligation with respect to each child shall end when the child attains eighteen (18), dies, becomes emancipated or ceases to reside with the Wife under circumstances where the Wife is no longer furnishing the child's support, whichever event shall first occur, provided, however, in the event a child is attending high school when he attains age eighteen (18), payment shall continue until the child completes his high school education or attains age nineteen (19).   When Graham has completed high school, child support for Ian shall be $2,049.00 per month.   This amount is the maximum on the chart for the Child Support Guidelines (2005) for one child.

At the time of judgment, the plaintiff and the defendant had two minor children:  Graham Wing Hines, DOB January 5, 1989;  and Ian Wing Hines, DOB December 16, 1991.   The older child turned eighteen on January 5, 2007 (before the date of dissolution) but did not graduate from high school until June 2007.¹

Paragraph 4 of the judgment pertains to alimony and states as follows:

Alimony

4.1 Commencing March 30, 2007, the Husband shall pay to the Wife the following as alimony:

Initially, $21,667.00 per month for an indefinite term with each installment due by the first day of every month.   Said amount shall be in effect until the parties have exchanged their tax returns in accordance with paragraph 4.8 herein.   On the first day of the month after the parties have exchanged their income tax returns, Husband shall pay to Wife a monthly amount as alimony equal to 38% of his annual gross income from his employment and from his rental property in addition to his child support obligation.   In addition, an annual adjustment shall be paid by Husband in accordance with the paragraph written on page 7a herein.   When Husband no longer has a child support obligation, he shall pay to Wife a monthly amount as alimony equal to 46% of his annual gross income from employment and rental property.   It is the intention of the parties that the net funds available to each from husband's income from business and rentals shall be equal.2  Because the Husband is presently a shareholder of two Subchapter S corporations which are taxed as partnerships, and Husband is a shareholder of said corporations, the Husband's gross annual earned income from employment from said corporations shall be his income as distributed and he shall be entitled to deductions for business expenses as made by the corporations.   Losses for any such Subchapter S corporations shall not reduce the Husband's gross annual earned income from his employment except to the extent that such losses are actually realized by him.   The parties understand that the term gross annual income from employment from a Subchapter S corporation refers to Husband's adjusted gross income, not the gross receipts of the corporation.   Husband shall not reduce his income artificially by inflating any deferred compensation.   Husband shall not compensate any employee in a manner which defeats the intent and purpose of this agreement.

[The following language of the agreement appears on a separate page of the Agreement captioned as page 7a.]

Notwithstanding the foregoing, there shall be a year-end adjustment by payment from the Husband to the Wife in an amount sufficient that the parties' income is equalized as set forth herein.   In arriving at the amount of this adjustment payment, the amount shall be determined by calculating the taxable income to each of the parties as set forth herein, calculating the taxes to be paid by each (deducting only the alimony from the Husband and adding the alimony to the Wife) and thereafter adjusting for the payment of non-taxable child support, if any.

Two other provisions of the dissolution judgment are relevant to this inquiry.   In paragraph 4.3, the parties stipulate that the defendant had personal income of $677,492 for 2006.   The parties also stipulated in paragraph 4.3 that the plaintiff had an imputed gross annual income of $20,000 per year.

The parties exchanged their 2007 income tax returns in accordance with the judgment, but have been unable to agree about the year-end alimony adjustment payment that was supposed to have been made shortly after the year ended.   The plaintiff's 2007 personal federal income tax return was submitted into evidence during the hearing.  (Plaintiff's Exhibit 4.) The defendant's personal income tax return was also offered as an exhibit.  (Plaintiff's Exhibit 1.) The court also received copies of the 2007 corporate federal income tax returns for each of the defendant's Subchapter S corporations.  (Plaintiff's Exhibits 2 and 3.)

The court notes at the outset that the dissolution judgment was entered on March 28, 2007.   This is significant because the year-end adjustment formula for 2007 was to be based both on each parties' income for that year and the child support and alimony payments that the defendant paid to the plaintiff during 2007.   However, because the agreement commenced on March 28, 2007, the defendant only paid alimony and child support to the plaintiff for nine months (April-December 2009).   This creates a problem because the agreement envisions twelve months of income and twelve months of alimony and child support payments.   Because of this, the court finds that in any computation to determine the year-end alimony adjustment for 2007, the parties' income needs to be adjusted downward by twenty-five percent (e.g. nine twelfths of the total sum).   The evidence presented at hearing proved that the plaintiff received alimony payments from the defendant in the total amount of $195,093 between April 1, 2007 and December 31, 2007.  (Plaintiff's Exhibit 1.) ³ The plaintiff also received other income of $81,315 during 2007.  (Plaintiff's Exhibit 4.) Her total income during the full twelve months of 2007 was $276,412.

The plaintiff paid state income taxes of $21,515 and federal income taxes of $64,902 during 2007.  (Plaintiff's Exhibit 4.)

As noted previously, the parties stipulated in the dissolution agreement that plaintiff had an imputed gross annual income capacity of $20,000 per year (adjusted for 9 months that figure would be $14,999.99).

Between April 1, 2007, and December 31, 2007, the defendant paid total child support to the plaintiff in the amount of $20,562.

The defendant received gross annual wages of $406,778 during 2007.   The defendant had total income of $826,154 for the year.  (Plaintiff's Exhibit 1.) His adjusted gross income for 2007, per line 37 of his federal income tax return, was $631,061.  (Plaintiff's Exhibit 1.)

As noted above, on the date of dissolution, the parties agreed that the defendant's personal income for 2006 was $677,492.  (See paragraph 4.3 of the March 28, 2007 Divorce Settlement Agreement.)   The parties stipulated in their divorce agreement that “Said income consists of Husband's ‘wages, tips, other compensation’ from his W-2 plus his net rental income from his commercial real estate holdings.”  (See paragraph 4.3 of the March 28, 2007 Divorce Settlement Agreement.)   During 2007, the defendant paid total federal income taxes of $180,996 and total state income taxes of $29,162.   As noted previously, defendant paid the plaintiff total alimony payments of $195,093 and total child support payments of $20,562 between April 1, 2007, and December 31, 2007.

The defendant claims that he made payments totaling $61,542.75 to the plaintiff and his children for family expenses during the first three months of 2007.  (See Defendant's Exhibits A and M.) The court has reviewed the cancelled checks for these payments (Defendant's Exhibit A).   Those checks represent various payments that the defendant tendered to the plaintiff, other individuals, and entities, that the defendant claims were for the support of his wife and children during the three-month period before judgment entered.

With the exception of two of the checks, all of the checks shown in Defendant's Exhibit A were written prior to March 28, 2007, when the judgment entered.   The parties' Divorce Settlement Agreement does not make any reference to any of the payments that defendant made on behalf of his wife and children prior to the date of judgment, nor to any credit that the defendant would be entitled to receive for having made those payments.

It was proven during the hearing that the defendant and his partner took a business loan totaling $81,000 from one of his two Subchapter S corporations during 2007.  (Transcript of January 6, 2009 hearing, page 58, lines 24-27.)   The defendant personally received half of this money ($40,500).   The plaintiff's accountant testified credibly that there was no real business purpose for the corporation to pay the money to the defendant as a loan instead of as wages.  (Transcript of January 6, 2009 hearing, page 58, lines 18-20.)   The evidence established that the defendant took the money as a loan from his corporation rather than as distributed income because this enabled the defendant to have the present value of the money without having to pay income taxes on it.  (Transcript of January 6, 2009 hearing, page 58, lines 24-25.)

The defendant argues that because the $40,500 was a loan, he will be required to pay it back to the Subchapter S Corporation at a future date.   The defendant contends that the plaintiff will receive her proportionate share of that money when the Subchapter S Corporation is sold and she is paid fifty percent of the net proceeds from the sale of that business.   The court does not concur with the defendant's reasoning.   The $40,500 that was “loaned” to the defendant was from the earnings of the Subchapter S Corporation.   The court finds that those earnings were available to be distributed as income to the defendant in 2007.   If those sums had been distributed to the defendant as income, the plaintiff would have received her due share of the money under the judgment's year-end alimony adjustment formula.   The court finds that the defendant elected to receive this money as a loan, not only for the tax benefits, but also because such designation precluded the necessity of having to share the money with the plaintiff.   The court finds that this thwarts the intent and spirit of paragraph 4 of the dissolution judgment.   That provision clearly stated that the defendant was not to “․ compensate any employee in a manner which defeats the intent and purpose of this agreement.”   The court finds that the $40,500 loan that the business made to the defendant during 2007 was a de facto income distribution.   The court will issue orders below with respect to this distribution.

During the hearing, accountants for both parties testified and opined about the year-end alimony adjustment controversy.

The plaintiff's accountant testified on both days of the hearing and offered twelve different possible scenarios-each with a different final payment amount-pertaining to the alimony adjustment figure.  (See Plaintiff's Exhibit 6 and Defendant's Exhibits B-L.) The court found that those multiple submissions were contradictory.   The court also found that the various computations indicated a level of uncertainty about how the year-end alimony adjustment payment was to be determined.

In a postjudgment memorandum, plaintiff's counsel stated:  “Although plaintiff offered through her witness ․ several other scenarios for illustrative purposes, the scenario set forth under case 2 [in Plaintiff's Exhibit 6] showing both filing status, exemptions and appropriate tax liabilities is the one which directly follows the definitions and calculations set forth in the agreement of the parties and equalizes the parties' income.”   The calculations which the plaintiff claims are dispositive appear on the first page of Plaintiff's Exhibit 6. It bears the caption “Case 2.” According to this computation, the defendant owes the plaintiff a year-end alimony adjustment payment of $106,144.   The court has carefully considered the computations prepared by plaintiff's accountant as reflected in Case 2 on Plaintiff's Exhibit 6. The plaintiff's accountant predicates her adjustment calculation on the assumption that the defendant had total gross income of $1,094,557 during 2007.   This sum apparently includes Subchapter S income of $524,929.   Although the defendant was taxed on this Subchapter S income, there was no evidence that these corporate earnings were distributed to him.   Furthermore, the defendant's 2007 tax return does not reflect total gross income of $1,094,557.   Rather, the defendant's tax return indicates that he had total income that year of $826,154, and adjusted gross income of $631,061.  (Plaintiff's Exhibit 1.) The court does not find that the Case 2 scenario calculation prepared by the plaintiff's accountant is dispositive.   Because the computation appears to be based in part on undistributed earnings of the Subchapter S Corporation, it appears to contravene language of the judgment.   The pertinent portion of the agreement states that “․ the Husband's gross annual earned income from employment from said corporations shall be his income as distributed ․ The parties understand that the term gross annual income from employment from a Subchapter S Corporation refers to Husband's adjusted gross income, not the gross receipts of the corporation.”   Thus, the court finds that plaintiff's accountant did not make her computation in accordance with the year-end alimony adjustment formula specified in the judgment.   The court rejects the evidence in Plaintiff's Exhibit 6 and finds it be inaccurate.

The defendant's accountant also testified at the hearing.   Based on his computations, the witness opined that the plaintiff owed the defendant a year-end alimony adjustment refund in the amount of $57,654.  (See Defendant's Exhibit M.) The court finds that the defendant's witness did not follow the formula mandated by the judgment.   His computations did not take into account the income that plaintiff received and the taxes that she paid in 2007.   The witness' calculations also impermissibly included the payments of $61,054 that the defendant paid on behalf of his wife and children prior to the entry of the judgment, plus defendant's payments of Medicare taxes and Social Security taxes, none of which were authorized by the contractual language of the parties' dissolution agreement.   Because the court does not find that the defendant's calculations complied with the formula specified in the judgment, the court also rejects this evidence as inaccurate.

DISCUSSION

Based on their respective evidentiary submissions, it is obvious that a very wide chasm separates the plaintiff and the defendant.   Plaintiff claims that the defendant should pay her a year-end alimony adjustment sum of $106,144 for 2007.   On the other hand, the defendant asserts that plaintiff owes him a refund of $57,654 for that year.   The parties who negotiated and crafted the written stipulation that they proposed to the court, are now apparently poles apart in their positions about the intent and implementation of the agreement's alimony adjustment provisions.   Several Appellate Court decisions are instructive with respect to this controversy.

The parties' stipulation, which was incorporated into the dissolution judgment, was a contract between the parties.  Caracansi v. Caracansi, 4 Conn.App. 645, 650 (1985);  Kronholm v. Kronholm, 16 Conn.App. 124, 129 (1998).

“Where rights, duties and obligations are fully stated in a written contract between the parties, the court is obligated to determine the intention of the parties from the language used, interpreted in light of the situation of the parties and the circumstances connected with the transaction.   The question is not what intention existed in the minds of the parties but what intention is expressed in the language used.”  Kronholm v. Kronholm, Id., page 130.   “[W]here the text of an agreement reasonably allows for varying interpretations-whether by inadvertence or design of the draftsmen-the need for judicial construction cannot and may not be avoided.”  Nelson v. Nelson, 13 Conn.App. 355, 359 (1988).

This court has carefully examined and considered the language contained in the parties' March 28, 2007 Divorce Settlement Agreement, which consisted of 25 typed pages, plus attachments.   That agreement clearly stated that the defendant would pay the plaintiff a monthly amount equal to thirty-eight percent of his annual gross income from his employment and his rental properties.   The parties also unequivocally stated that the term “gross annual income” meant “․ Husband's adjusted gross income, not the gross receipts of the corporation.”   The court finds the foregoing wording expresses the clear intent of the parties.   Their contractual language indicates that the parties intended, as a starting point in their effort to equalize their annual income, that the defendant would give the plaintiff monthly payments that equaled thirty-eight percent of his gross annual income.

As noted previously, the defendant's 2007 federal income tax return indicated that his adjusted gross income for that year was $631,061 (Plaintiff's Exhibit 1).   Thirty-eight percent of $631,061 is $239,803.13.   Under the thirty-eight percent of adjusted gross income target figure, for 2007 the defendant owed the plaintiff the total sum of $239,803.13.   Under this calculation, the defendant's monthly alimony payment to the plaintiff would be $19,983.59 ($239,803.13/12 = $19,983.59).   The evidence at hearing established that defendant paid plaintiff the sum of $21,667 per month between April and December 2007, for a total alimony payment of $195,093.   If the defendant had paid the monthly sum of $21,667 during each of the twelve months in 2007, he would have paid a total alimony sum of $260,004, which is $20,200.87 more than thirty-eight percent of his gross adjusted income for that year.   Stated another way, if the parties had merely agreed that, in addition to child support, the plaintiff would receive thirty-eight percent of the defendant's adjusted gross income, then the defendant would have overpaid his alimony obligation for 2007.   However, the parties' agreement did not stop there.

The language of the agreement indicates that the monthly payment to the plaintiff by the defendant of thirty-eight percent of his adjusted gross income was the initial step towards equal equalization.   The agreement also stated that at the end of each year, after the defendant had paid monthly sums totaling thirty-eight percent of his adjusted gross income to the plaintiff, plaintiff and the defendant would pursue further income equalization by following the formula on page 1a of the agreement.   That portion of the contract states:  “Notwithstanding the foregoing [e.g. defendant's payment of thirty-eight percent of his adjusted gross income to the plaintiff], there shall be a year-end adjustment by payment from the Husband to the Wife in an amount sufficient that the parties' income is equalized as set forth herein.”   The language on page 7a of the agreement specifically notes that the year-end equalization adjustment payment was to be determined by calculating “the taxable income of each of the parties as set forth herein ․” The court finds that the term “taxable income of the parties as set forth herein,” means their “adjusted gross income” as referenced in paragraph 4.1 on page 7 of the agreement.   Use in the alimony adjustment formula of each party's adjusted gross income figure appears to be logical, because the language of the judgment formula requires that the alimony payments be deducted from the husband and added to the wife.   The defendant's 2007 tax return indicates that his adjusted gross income of $631,061 was calculated by subtracting his alimony payments of $195,093 from his total income of $826,154 ($826,154 -$195093 = $631,061).   Furthermore, per the plaintiff's 2007 tax return, her adjusted gross income of $276,412 includes the $195,093 sum that the defendant paid to her as alimony during that year.   Per the dissolution agreement, the amount of the year-end equalization payment was also to be calculated by making adjustments for the taxes that each party paid during 2007 and for the total non-taxable child support that defendant paid to the plaintiff during the year.⁴

Because the court did not find the hypothetical calculations provided by either party's expert accurately tracked the equalization formula delineated in the judgment, the court has done the following calculations:  The defendant's total income for 2007 was $826,154.   After deduction of the $195,093 that he paid in alimony for nine months, his adjusted gross income was $631,061.   Adjusting that adjusted gross income figure by nine-twelfths, the court computed that the defendant had pro-rata adjusted gross income of $473,295.74.   The defendant paid total state and federal taxes of $180,996 during 2007.   Nine-twelfths of that amount equals $135,747.⁵  By subtracting the pro-rata amount of the taxes that the defendant paid from his pro-rata adjusted income figure, the defendant is left with $337,548.74. ($473,295.74-$135,747 = $337,548.74).   Subtracting the $20,562 that the defendant paid to the plaintiff for nine months of child support, the defendant's net available income is $316,986.74.   The court finds that for 2007, the defendant's net available income according to the judgment formula is $316,986.74.

The plaintiff received alimony of $195,093 between April 1, 2007, and December 31, 2007.   She received other income during the twelve months of 2007 in the amount of $87,579.   The plaintiff also had a business loss during 2007 in the amount of $6,260.   The net total income that she received from all sources other than alimony during the twelve months of 2007 was $81,319.   Nine-twelfths of that amount equals $60,989.24.   By adding $195,093 to $60,989.24, the court finds that the plaintiff had a pro-rata adjusted income during 2007 of $256,082.24.

The plaintiff paid total federal and state income taxes of $64,902 during 2007.  (Plaintiff's Exhibit 4.) Adjusting that number by nine-twelfths, the plaintiff paid pro-rata taxes of $48,676.50.   Subtracting the pro-rata taxes of $48,676.50 from the pro-rata adjusted gross income of $256,082.24, the sum of $207,405 remains.

The parties stipulated that the plaintiff has an imputed annual income of $20,000.   Adjusted by nine-twelfths, the plaintiff's pro-rata imputed income for 2007 is $14,999.99.   Adding the pro-rata imputed income of $14,999.99, plus the child support amount of $20,005.62, to the pro-rata income figure of $207,405, the plaintiff has total available income of $242,966.99.   Based on that computation, the court finds that plaintiff had net available income for 2007 in the amount of $242,966.99.

In order to arrive at the 2007 equalization figure, the court has added the plaintiff's net available income to the defendant's net available income.   That equals the sum of $559,953 ($242,966.09 + $316,986.74 = $559,953.73).   If that total income figure is divided by two, each party should receive the net sum of $279,976.86.   The court finds that in order to achieve equalization of their net available income for 2007, the defendant should pay the plaintiff the sum of $37,009.87 ($316,986.74-$37,009.87 = $279,976.87;  $242,966.99 + $37,009.87 = $279,976.86).   The court will issue orders with respect to such a payment below.

The court notes that it has not included the pre-judgment payments of $61,543 that the defendant claims he paid for the support of his family during the first quarter of 2007.   The language of the judgment does not make reference to those payments, and the doctrine of merger would seem to preclude their inclusion.   Additionally, because the court's calculations were based on the nine months of alimony and child support payments that the defendant made to the plaintiff under the terms of the judgment, the court used only seventy-five percent of the defendant's income (nine-twelfths) in its calculations.

ORDERS

1. The Plaintiff's Motion for Order of Payment (Motion # 144) is hereby GRANTED.

2. The court orders that the defendant shall pay to the plaintiff, within thirty days of the date hereof, the sum of $37,009.87 as the year end alimony adjustment payment required under the provisions of paragraph 4 of the March 28, 2007 dissolution judgment.

3. The court further orders that the defendant shall pay to the plaintiff, within thirty days of the date hereof, the additional sum of $20,250.   This sum is fifty percent of the loan proceeds of $40,500 that the defendant received from one of his Subchapter S corporations during 2007.   In making this equitable order, the court recognizes the axiom that there is a present value to money.   As noted above, the court found that the $40,500 could have been distributed as income to the defendant by his Subchapter S Corporation in 2007.   The defendant elected to take this money as a loan instead of as income that was distributable to him.   This precluded the plaintiff's receipt of her share of that money in accordance with the year-end adjustment formula and violated both the spirit and letter of the agreement.   In the event that the defendant ultimately repays the sum of $40,500 to his corporation, the court orders that he shall immediately notify the plaintiff, and provide documentation of said repayment to her.   In that event, the sum of $20,250, shall be deducted from the fifty percent share of the net proceeds that the defendant receives from the sale of that corporation.⁶

4. No counsel fees are awarded to either party.   The court has carefully reviewed the parties' 2007 tax returns and their current financial affidavits and finds that both the plaintiff and the defendant have sufficient income and assets with which to pay their own legal fees.

The court also is compelled to make the following recommendations:

The judgment provisions at issue in this case resulted from a comprehensive written settlement agreement that the parties and their counsel negotiated over a lengthy period of time, and then proposed to the court as final orders in the dissolution judgment.   This court logically assumes that the plaintiff and the defendant are very familiar with both the wording and the intent of their agreement.   The court finds it very unfortunate that the plaintiff and the defendant have disagreed so vehemently and for so long about the meaning and implementation of the contractual language that they jointly authored and proposed less than three years ago.

At the outset of this proceeding, the court inquired if the parties had' participated in a judicial pre-trial conference prior to litigating the matter.   The court was informed that the parties had not engaged in a judicially-supervised settlement conference.   The court suggested that the parties consider participating in a judicial pre-trial with another judge while this hearing was ongoing.   Unfortunately, this did not occur.   The court is very aware that its decision and orders in this case may not end the controversy.   As with any litigation at the trial court level, the possibility of an appeal by either or both of the parties always exists.   Additionally, because the language of the dissolution judgment mandates a yearly alimony adjustment, annual legal disputes (and the financial and emotional trauma that will inevitably result therefrom) are very possible.   Year-end adjustments for 2008 and 2009 still remain to be made.

To be workable, the parties' agreement requires a level of communication and cooperation that the parties have not yet been able to achieve:  To be workable, the agreement requires a recognition on the part of the plaintiff that the defendant may be required to utilize the retained earnings of his Subchapter S corporations for operating expenses, to make legitimate capital improvements, and to comply with bank covenants.   To be workable, the agreement requires recognition by the defendant that he owes a duty of fiduciary responsibility, openness, and fairness to the plaintiff.   Unfortunately, the parties have yet to embrace such concepts.   The undersigned respectfully recommends to both the plaintiff and the defendant that, with the assistance of their highly capable counsel, they immediately engage in private or judicially-supervised mediation in an attempt to globally resolve their conflict over this issue, and to collaboratively implement the financial orders to which they both agreed in 2007.

In the event that the parties are unsuccessful in settling this matter, this court also has a recommendation to future trial courts who may be called upon to decide similar disputes concerning the year-end alimony adjustment provision of the parties' agreement.   The courts presiding over any such future litigation may well wish to consider appointing an accountant, or other financial expert, as a judicially-appointed witness, pursuant to the applicable provisions of the Connecticut Practice Book. (See, for example, C.B.P. § 25-33.)   The judicially-appointed expert witness could undertake a comprehensive review and analysis of the parties' financial records, testify, and make recommendations to the court.   In addition, the court may wish to consider assessing the fees of such an independent expert to the parties.

SO ORDERED.

BY THE COURT,

Dyer, J.

FOOTNOTES

FN1. Although the dispute before the court relates solely to year-end alimony adjustment payments, judgment provisions and information relating to the child support paid by the defendant to the plaintiff are being recounted herein because the child support payments are a factor in an alimony adjustment formula..  FN1. Although the dispute before the court relates solely to year-end alimony adjustment payments, judgment provisions and information relating to the child support paid by the defendant to the plaintiff are being recounted herein because the child support payments are a factor in an alimony adjustment formula.

FN2. The preceding sentence was hand-written on to the original copy of the Settlement Agreement and initialed by both the plaintiff and the defendant prior to its submission to the court on March 28, 2007..  FN2. The preceding sentence was hand-written on to the original copy of the Settlement Agreement and initialed by both the plaintiff and the defendant prior to its submission to the court on March 28, 2007.

FN3. Plaintiff's Exhibit 4, which is a copy of the original draft of Plaintiff's 2007 tax return, erroneously indicates that $227,504 was paid to her as alimony in 2007.   This figure was incorrect.   As noted, the plaintiff actually received total alimony of $195,093 from the defendant during the nine-month period between April 1, 2007 and December 31, 2007..  FN3. Plaintiff's Exhibit 4, which is a copy of the original draft of Plaintiff's 2007 tax return, erroneously indicates that $227,504 was paid to her as alimony in 2007.   This figure was incorrect.   As noted, the plaintiff actually received total alimony of $195,093 from the defendant during the nine-month period between April 1, 2007 and December 31, 2007.

FN4. A portion of the judgment reads:  “In arriving at the amount of this adjustment payment, the amount shall be determined by calculating the taxable income to each of the parties as set forth herein by calculating the taxes to be paid by each (deducting only the alimony from the Husband and adding the alimony to the Wife) and thereafter adjusting for the payment of non-taxable child support, if any.”.  FN4. A portion of the judgment reads:  “In arriving at the amount of this adjustment payment, the amount shall be determined by calculating the taxable income to each of the parties as set forth herein by calculating the taxes to be paid by each (deducting only the alimony from the Husband and adding the alimony to the Wife) and thereafter adjusting for the payment of non-taxable child support, if any.”

FN5. The court is not including in this computation Social Security taxes and Medicare taxes paid by either party.   The court construes the judgment to mean income taxes and not Medicare or Social Security deductions.   The latter are contributions which both parties pay toward post-retirement governmental benefits..  FN5. The court is not including in this computation Social Security taxes and Medicare taxes paid by either party.   The court construes the judgment to mean income taxes and not Medicare or Social Security deductions.   The latter are contributions which both parties pay toward post-retirement governmental benefits.

FN6. During the hearing, the plaintiff's accountant testified about her belief that the defendant's Subchapter S Corporations may have retained other earnings that should have been distributed to the defendant as income during 2007.   However, with the exception of the $81,000 shareholder loan, the plaintiff did not prove that the defendant had any impermissibly withheld the retained earnings of the Subchapter S Corporations..  FN6. During the hearing, the plaintiff's accountant testified about her belief that the defendant's Subchapter S Corporations may have retained other earnings that should have been distributed to the defendant as income during 2007.   However, with the exception of the $81,000 shareholder loan, the plaintiff did not prove that the defendant had any impermissibly withheld the retained earnings of the Subchapter S Corporations.

Dyer, Richard W., J.