Barbara Rein v. Gregory Rein (2012)

MEMORANDUM OF DECISION ON PLAINTIFF'S AND DEFENDANT'S MOTIONS FOR MODIFICATION OF UNALLOCATED SUPPORT

RELEVANT HISTORY OF THE FILE

The parties entered into a stipulated judgment to dissolve their marriage on February 15, 2007 (Simon, J.).   The judgment ordered the defendant to pay unallocated support to the plaintiff in the amount of $730.00 per week for five and one-half years.   The defendant filed a motion (# 159) to reduce his obligation on September 30, 2009 claiming that the plaintiff had obtained full-time employment earning significant sums not contemplated at the time of judgment.   The plaintiff countered with a Motion to Modify (# 161) filed October 21, 2009.   She asserted that the defendant's unallocated order should be higher based on his then-current earnings.

Neither party pursued these motions for about 15 months until defendant's Modification somehow appeared on the court's December 8, 2010 docket.   There were reclaims and objections thereto until the court, Adelman, J., found good cause for the delay, reserved a decision on retroactive application of any eventual order and directed the parties to proceed with discovery.

The discovery process did not go quickly.   The plaintiff filed an Appearance in lieu of her attorney and a reclaim of her 2009 upward modification on February 15, 2011.   The court, Abery–Wetstone, J. approved this on February 16, 2011.   The now self-represented plaintiff filed a plethora of discovery requests.   The defendant sought extensions of time.   A hearing date in September 2011 came and went because the plaintiff sought further discovery.   On September 26, 2011 the court, Abery–Wetstone, J., reduced defendant's unallocated support order from $730.00 per week to $500.00 per week without prejudice and reserved the consideration of retroactive application of any new order to the trial court.

More delays ensued over plaintiff's inadequate disclosure of an expert witness before the 2009 motions finally came to be heard before this court on December 15, 2011.   Each party seeks the retroactive application of their motion from the time of service on the other party as allowed by Connecticut law.

APPLICABLE LAW

A child support order may be modified upon a showing that there has been a substantial change of circumstances.  General Statutes § 46b–86, as amended by Public Acts 2011, No. 11–214, § 8. A court is allowed to modify a support order when the financial circumstances of the individual parties have changed, regardless of their prior contemplation of such changes.  Turner v. Turner, 219 Conn. 703, 718 (1991).  “The party seeking modification bears the burden of showing the existence of a substantial change in the circumstances.”   Syragakis v. Syragakis, 79 Conn.App. 170, 174 (2003).

The basis for modification of alimony is similar.   First, this court must determine whether there has been a substantial change in the circumstances of either party since the latter of the date of the dissolution judgment or last modification.  Hardisty v. Hardisty, 183 Conn. 253 at 259 (1981).   The party seeking the modification bears the burden of showing the existence of a substantial change in circumstances.  Mundell v. Mundell, 955 A.2d 99, 110 Conn.App. 466 (2008).

Connecticut General Statute § 46b–86 provides that financial orders are modifiable in the event of a substantial change in circumstances unless precluded by language in the divorce decree.   In this case, the dissolution judgment states that the amount of the unallocated order can change.   Thus, the order is modifiable if this court finds that there has been a substantial change in circumstances of either party.   When determining whether there is a substantial change in circumstances, the court is limited in its consideration to conditions arising subsequent to the entry of the dissolution decree.   Schorsh v. Schorsh, 53 Conn.App. 378, 382–83, 731 A.2d 330 (1999).

Once a trial court finds a substantial change in circumstances, it can properly consider the motion for modification of alimony.   The court then applies the statutory factors set forth in Conn. Gen.Stat. § 46b–82.   Pursuant to this section, the Court “shall consider the length of the marriage, cause for the dissolution or legal separation, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate and needs of the parties and the award, if any which the Court may make pursuant to Section 46b–81, and in the case of a parent to whom the custody of minor has been awarded, the desirability of such parent's securing employment.”

FACTUAL FINDINGS, DISCUSSION AND ORDERS

In 2007 the court set the original unallocated support order at $730.00 per week on a clear basis.   The plaintiff essentially had no income and was allowed to earn up to $20,000.00 without consequence.   The Defendant, a partner in a family restaurant and deli, earned $69,000.00 consisting of his salary of $57,000.00, interest income of $5,000.00 and his partnership distribution of $7,000.00.

In 2009 both plaintiff and defendant asserted a substantial change in their financial circumstances.   In their respective motions defendant claims his income is down from 2007;  plaintiff counters that it is up.   For the reasons explained below, the court finds that the defendant has met his burden of proof and is therefore entitled to a reduction in the amount he pays for the support of his children and former wife.   Conversely, the plaintiff's motion is denied.

The court received the clear and credible testimony of Mr. James Bascetta, a certified public accountant responsible for keeping the Rein family business accounts.   He indicated that the defendant had a gross income in 2010 of $62,500.00, a reduction of about ten percent from 2007.   He explained that the Rein family ventured with others to open another restaurant in Springfield, MA. The plan failed disastrously, leaving the family owing a debt of $1.15 million to TD Bank in January 2010.

The defendant's personal share of this loss was $265,000.00.   He paid $15,000.00 out of his personal funds and borrowed $250,000.00 from the family business as did others in the partnership.   In order to secure adequate financing for the continuing operation of the remaining restaurant, the partners agreed with the bank in writing to apply any bonuses they might be paid by the business to the payment of their debt.   The defendant paid about $20,000.00 toward his loan in 2010 using his “bonus.”   It is precisely this income that plaintiff claims is far greater than that which defendant earned at the time of the original dissolution.

The CPA opined that had the partners not taken on the business debt created by the failure of the new deli, the remaining restaurant would be saddled by an obligation that would threaten its continued existence.   The business pays substantial bonuses to its partners, but if it had to pay the debt, there simply would be no profit to distribute as bonuses.   The partners are contractually bound to apply these monies to their loans, and thus never have use of the money.   The court accepts the logic of this analysis.   The circumstances are similar to “self-employment earnings” as defined by C.G.S. Section 46b–215a–1(11)(A)(xvii).   Such earnings are includable in gross income for child support purposes, but only after “deduction of all reasonable and necessary business expenses.”   See also, Means v. Means, 1996 WL 364789 Conn.Super. (May 22, 1996;  Teller, J.) [17 Conn. L. Rptr. 26].

Furthermore, if the second restaurant had succeeded and the defendant made more money, the plaintiff might justly seek increased support.   But just as “the rising tide carries all boats,” conversely defendant now seeks a lesser obligation “at low tide.”

Simultaneously, plaintiff has gone from earning virtually no income at the time of the dissolution to a substantial salary as a branch office administrator for Edward Jones, an investment firm.   She began in 2009 at $15.31 an hour for a 38– to 40–hour week, and she now earns $16.09 per hour plus benefits.   Her pay combined with the rent she receives from her sister puts her annual gross income at about $37,000.00.

Applying the statutory criteria of Section 46b–82, the court finds that the dissolution court's determination of those factors remains about the same for each party—except for that of need.   Defendant's financial circumstances are appreciably worse, and plaintiff's are better.   Based on the facts of this case and the parties' current relative need, the court orders defendant to pay $230.00 per week alimony to plaintiff.

Presumably the original unallocated order took advantage of the plaintiff's lower tax burden compared to that of defendant.   The court declines to continue an unallocated order because that tax benefit no longer exists, given plaintiff's current earnings.

The Guidelines worksheet prepared by the Family Relations Office reflects the parties' current incomes.   Assuming a “standard” access schedule, the defendant's obligation to the plaintiff is $246.00 per week, an amount that the court rounds upward to $250.00 for ease of calculation.   There was some evidence presented of the defendant spending more time with the children since the time of the original dissolution, but the court finds that even with this additional access, the schedule is a “traditional” one that does not require any deviation in the child support for shared parenting.   The court orders defendant to pay $250.00 weekly child support to the plaintiff.   The allocation of the children's unreimbursed expenses as these were defined in the original Judgment shall remain unchanged:  sixty percent (60%) to the plaintiff and forty percent (40%) to the defendant.   These numbers remain substantially consistent with the applicable Guidelines.

RETROACTIVE APPLICATION

No order for periodic payment of permanent alimony or support may be subject to retroactive modification, except that the court may order modification with respect to any period during which there is a pending motion for modification of an alimony or support order from the date of service of notice of such pending motion upon the opposing party pursuant to section 52–50.  Sec. 46b–86, as amended by Public Acts 2011, No. 11–214, § 8. The significant change in circumstances found by the court as noted by the defendant in his motion, plaintiff's employment, took place sometime prior to its filing.   The defendant filed his Motion for Modification on September 30, 2009.   He served plaintiff the next day, and the court finds she received this motion no later than the following week, 124 weeks ago (to February 24, 2012, counting Fridays).   The defendant is, therefore, entitled to the retroactive application of this court's order from the first week of October 2009 to the week of September 26, 2011 (102 weeks) and an additional 22 weeks from the week of September 26, 2011 to the present (22 weeks to February 24, 2012).

The parties are ordered to discuss reasonable plans for any required reimbursement of the defendant by the plaintiff.   They shall report their progress to the court within two weeks of the date of this order, and if necessary, thereafter schedule a hearing for the court to consider any further orders necessary.   The court retains jurisdiction over this matter to this extent.

All other orders of the court not affected by this one remain unaltered and in full force and effect.

SO ORDERED.

BY THE COURT,

Carbonneau, J.

Carbonneau, John L., J.