John P. Deliso v. Melinda Deliso (2013)

MEMORANDUM OF DECISION REGARDING DEFENDANT'S MOTION FOR ORDER AND PLAINTIFF'S MOTION TO MODIFY CHILD SUPPORT AND ALIMONY

HISTORY OF THE CASE

These parties once enjoyed an affluent lifestyle, but they fell on economic hard times during the Great Recession.   The court, Taylor, J., dissolved their marriage on October 15, 2010 and adopted their settlement agreement which included a provision that postponed the establishment of child support or alimony orders until plaintiff obtained employment, or the expiration of seven months, whichever event occurred first.   After the seven months passed, plaintiff had not found suitable employment.   Defendant then moved and this court established a child support order of $450 per week per the Guidelines and an alimony order of $500 a week in her favor on April 4, 2012.   See, Court File, # 143.

However, given plaintiff's unemployment and the then-prevailing economic uncertainty, the court allowed its orders to accrue until January 1, 2013 to give plaintiff an opportunity to get back on his financial feet.   The court found his earning capacity to be $150,000.00 annually based not only on his prior income but also on his savvy business acumen, varied business contacts and versatility in several lucrative fields of endeavor.   The court also assessed defendant's earning capacity at $15,000.00 a year given her long-standing role in the family as homemaker, the desirability of her remaining a ready resource for the parties' children and her lack of work experience.

On August 13, 2012 defendant filed a Motion to Modify, Postjudgment (# 150).   She asserted that plaintiff had become employed and that the respite/accrual of child support and alimony granted by the court in April 2012 was no longer necessary.   After a full evidentiary hearing the court declined to alter its orders, reasoning that plaintiff had justly relied on the court's decision when planning his and his family's immediate financial future.   The court refused to “change the rules in the middle of the game,” expecting plaintiff to act in his and his family's best interests.

On January 4, 2013—once the court-granted respite had expired—defendant filed a motion (# 154) seeking to determine plaintiff's child support and alimony arrearage and its immediate payment.   Plaintiff responded on January 23, 2013 by filing a Motion for Modification of Alimony and Child Support, Postjudgment (# 155.00 and 155.01).   He asserted that his obligations should be decreased because although he had become employed at an annual salary of $120,000.00 a year, this was significantly lower than the $150,000.00 earning capacity the court originally found;  that through no fault of his own, he no longer collected some $6,000.00 a year in corporate director's fees and that defendant's income had increased.

On February 12, 2013 plaintiff filed a Motion for Counsel Fees—Post Judgment (# 157) in order to defend against plaintiff's modification.   The court heard all motions on April 30 and May 1, 2013.   Both parties were represented by able counsel.

FINDINGS OF FACT

All facts are found by a preponderance of the evidence after careful review of the testimony and exhibits presented.   The court assessed and weighed the credibility of all witnesses who appeared before it.   The facts are not especially in dispute, and the court accepts the testimony of each party as credible.

Plaintiff testified that he is now employed by BNB Manufacturing of Winsted, CT. He received his first paycheck in May 2012.   His salary was $120,000.00 per year.   See, Defendant's Exhibit A.¹ He may receive bonuses, but these would be in the discretion of the company and not contractual.   The company paid him a $24,000.00 bonus at the end of February or the beginning of March 2013.   The company withheld thirty-eight percent (38%) of this amount for taxes, leaving him with nearly $15,000.00.   He paid some bills with this money, including part of his obligation to defendant.   He currently has about $8,000.00 remaining.

He contributed $2,146.13 to his new company's 401K from his hire date until recently when he opted out of this payroll deduction.

Soon after he began his new job, plaintiff started to pay his child support and alimony obligation, but he did not significantly address the arrearage that accrued while the orders were suspended.   The parties agree that plaintiff currently owes defendant $11,121.40 in child support and $18,357.10 in alimony.   This is a sum of $29,478.50.

Plaintiff earned $8,500.00 in director's fees in 2012.   See, Defendant's Exhibit B, but the company has been sold and will no longer be a source of income for him.

Plaintiff purchased a home in Simsbury on September 10, 2013 for $310,000.00.   See, Defendant's Exhibit C. The parties' former marital residence was in Simsbury, and their children attend Simsbury schools.   These premises sold in July 2012.   Defendant could not afford to continue to live in Simsbury, so she opted for a rental in Granby.   Plaintiff's lease in Simsbury expired in September 2012.   He testified that he bought the new house to secure two objectives:  he wanted his children to continue in the Simsbury school system without interruption, and he determined his expenses would be somewhat less in the new home.

Plaintiff received a $275,000.00 mortgage from the Joseph Deliso Trust.   The annual interest on this mortgage is $10,077.00.   Plaintiff does not have to pay this amount because it is part of his distribution of income as a beneficiary of the trust.   The amount of the annual distribution depends on the income derived each year from the trust.   In the recent past plaintiff has received as much as $15,000.00 annually from the trust.   The taxes on the trust for the 2011 and 2012 tax years are not yet done and, obviously, 2013 is not yet due;  so he has no idea what his final share of the trust income will be for these years.

The trust's mortgage covered about eighty-eight percent (88%) of plaintiff's new home's purchase price, so he brought $39,324.89 of his own money to the closing.   See Defendant's Exhibit C.

Defendant now makes $16.00 per hour with New Britain Emergency Medical Services.   This is $5.00 more an hour than she earned at the time of the court's April 4, 2012 decision.   Her hours, about twenty per week, however, remain the same as before.   She still has significant child care responsibilities, and she now must drive about an hour to get from her Granby home to New Britain.   Her additional net weekly earnings come to well less than $100.00.

APPLICABLE LAW, FURTHER FINDINGS AND DISCUSSION

“General Statutes § 46b–86 governs the modification or termination of an alimony or support order after the date of a dissolution judgment.   When ․ 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.)  Bruno v. Bruno, 132 Conn.App. 339, 345–46 (2011), cites Borkowski v. Borkowski, 228 Conn. 729, 734–38, 638 A.2d 1060 (1994).

The modification of a child support order is similarly controlled by § 46b–86.   A child support order may be modified upon a showing that there has been a substantial change of circumstances, or the final order for child support deviates more than 15% from the child support guidelines.

“The first [showing] allows the court to modify a support order when the financial circumstances of the individual parties have changed, regardless of their prior contemplation of such changes.   The second allows the court to modify child support orders that were once deemed appropriate but no longer seem equitable in the light of changed social or economic circumstances in the society as a whole.”  Turner v. Turner, 219 Conn. 703, 718 (1991).   See also Weinstein v. Weinstein, 104 Conn.App. 482, 494 (2007), cert. denied, 285 Conn. 911 (2008).

“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).

Plaintiff sought to meet this burden by introducing evidence that he actually made less money than the court found he had the capacity to earn;  that he would no longer earn director's fees and that defendant made more money than she did when the court fashioned its orders.

The loss of his director's fees pales in comparison to the $24,000 bonus he received in 2013.   This loss is not found to be a significant change in circumstances.   Defendant earns more now each week, but after considering taxes and her increased commuting expenses, this is not a significant change either.

As to plaintiff's primary assertion:  this court clearly established its April 4, 2012 orders on the earning capacity of the parties.   The circumstances of the Bruno case, supra, are very similar to plaintiff's:

At the time of the dissolution, the court evaluated the plaintiff's earning capacity not in terms of his actual earned income, but by considering his skills, employability, age and health.   The court discussed the facts that he held a master of business administration degree, was a chartered financial analyst and had expertise as a “value investor specializing in technology and communications.”

At the time of the dissolution, the court found that the plaintiff was seeking one of the very limited number of senior portfolio manager positions in the country but that he did not have such employment.   At the time that it considered the motion to modify, the court heard testimony from [an expert], based only on the perspective of [the expert's] executive search firm, that there were no portfolio manager positions available.   The court also heard evidence from the plaintiff that he was not seeking such employment, but had become self-employed in another venture prior to the date of dissolution.   We conclude that the evidence concerning the decline in the availability of senior portfolio manager positions did not affect the plaintiff's earning capacity.   The plaintiff has not demonstrated that any change in his skills or employability has occurred.   To the contrary, the plaintiff testified that, in short time, he expected to replicate the level of compensation he had earned as a senior portfolio manager, while self-employed at his hedge fund.  Bruno, supra. [fn3].

The Appellate Court in Bruno held that the trial court “could not reasonably find there was a decrease in the plaintiff's earning capacity that constituted a substantial change in the plaintiff's financial circumstances” in the year that had passed from the date of the court's original capacity findings to the date of the current motion for modification.  Id. at 347.

Plaintiff introduced no evidence about any change in his capacity to earn.   His proffered change of circumstances is that he did not find a job that yielded an income equal to the earning capacity found by the court in April 2012.   Only about nine months passed from the date of the court's original capacity findings to the date of his actual employment.   In that time the court finds that his education, vocational skills and business acumen have not deteriorated.   Plaintiff offered no evidence to the contrary.   In fact his 2012 earnings, if annualized, would come very close to the court's $150,000.00 capacity finding.²

The court ordered plaintiff to pay weekly child support of $450 on April 4, 2012 in accordance with the state's Child Support Guidelines.   Calculating the Guidelines ³ on plaintiff's and defendant's annualized 2012 earnings per their current Financial Affidavits yields a result of $412.53—within fifteen percent of the prior order.  “[A]ny deviation of less than fifteen percent from the child support guidelines is not substantial.”  Conn. Gen. Statutes Section 46b–86(a).

The court's April 2012 orders acknowledged the sacrifice that defendant and the parties' children made while waiting for plaintiff to regain financial opportunity and means.   In the divorce settlement defendant agreed to defer alimony and child support.   She put aside the high station the family once enjoyed and reduced their expenditures and—perhaps more significantly—their expectations.   She took an hourly job cleaning dog kennels.   She moved from a spacious home in a fine neighborhood to an apartment.   She put the family's formerly affluent lives “on hold” in the hope of a better future.

However, her agreement came with limitations, terms and conditions.   The court's April 2012 orders extended this respite and gave plaintiff the time he needed to right his financial ship.   The court, however, set limitations, terms and conditions of its own.   When the court, in effect, reconsidered its orders in August 2012, it declined to alter them, finding that plaintiff was rightly entitled to rely on the timetable the court had set.

Plaintiff got his new position in May 2012.   He put money toward his retirement.   He began to pay his support obligations, but he did not pay off his accrued child support and alimony arrearage.   He bought a house in Simsbury with nearly $40,000.00 of his own money.   He says he did this for the benefit of his children.   The court notes, however, that in addition to keeping the children in the same school system, plaintiff also gets to live in this new home and has the opportunity to accumulate equity.   He could have made other choices that yielded the same benefit to the children like renting in Simsbury temporarily.   He would then have had the money to pay off his obligation to defendant.

The court finds a wide disparity in both the actual earnings of the parties and their earning capacity.   The court further finds, given this disparity, that its other financial awards would be undermined if the defendant had to pay her attorneys fees in this matter.  Conn. Gen.Stat. Section 46b–62;  Costa v. Costa, 57 Conn.App. 165, 171 (2000).

Plaintiff's current motions seek to extend the respite he was given once again.   He acknowledges a debt to defendant, but he wants to pay this obligation over six years at no interest.   He asks to reduce his child support and alimony obligation retroactive to the date of his modification motion for reasons contrary to the law, as Bruno illustrates.

The court previously found plaintiff to be a sophisticated businessman.   That has not changed.   He knew of and should appreciate the “quid pro quo” of his original agreement with defendant and the court's April 2012 orders.   Just as the court in August 2012 allowed plaintiff to rely on the court's ordered timetable, defendant is equally entitled.

The grace period is over.   The reckoning is now due.

ORDERS

In fashioning its orders, the court has considered CGS Sections 46b–62, 46b–86 and all other applicable statutes.   The court enters the following orders:

1. Defendant's Motion for Order (# 154) is granted.   Plaintiff shall pay the sum of $29,478.50 ($11,121.40 for child support and $18,357.10 for alimony) within thirty (30) days of the date of this decision.   If he fails to timely do so, time being of the essence, then any remaining balance shall accrue simple annual interest in the amount of 5% until paid in full.

2. Defendant's Motion for Counsel Fees (# 157) is granted.   Plaintiff shall pay defendant $9,000.00 attorneys fees within thirty (30) days of the date of this decision.   If he fails to timely do so, time being of the essence, then any remaining balance shall accrue simple annual interest in the amount of 5% until paid in full.

3. Plaintiff's Motions for Modification of Alimony and Child Support (# 155.00 and 155.01) are denied because plaintiff failed to establish any substantial change of circumstances.

4. All other orders of the court not affected by these orders remain unchanged and in full force and effect.

SO ORDERED.

BY THE COURT,

Carbonneau, J.

FOOTNOTES

FN1. According to this exhibit, plaintiff earns $2,307.69 per week. $2,307.69 times 52 weeks equals $119,999.88.   According to his sworn Financial Affidavit of April 30, 2013, plaintiff makes $125,000.00 per year.  (Weekly earning gross of $2,403.84 times 52 weeks equals $124,999.68.).  FN1. According to this exhibit, plaintiff earns $2,307.69 per week. $2,307.69 times 52 weeks equals $119,999.88.   According to his sworn Financial Affidavit of April 30, 2013, plaintiff makes $125,000.00 per year.  (Weekly earning gross of $2,403.84 times 52 weeks equals $124,999.68.)

FN2. Plaintiff's 2012 salary was $120,000.00.   He received $8,500.00 in director's fees.   His Deliso trust income is no less than $10,000.00 and may be more.   The sum of these three numbers is $138,500.00, over 92% of the $150,000.00 capacity found by the court..  FN2. Plaintiff's 2012 salary was $120,000.00.   He received $8,500.00 in director's fees.   His Deliso trust income is no less than $10,000.00 and may be more.   The sum of these three numbers is $138,500.00, over 92% of the $150,000.00 capacity found by the court.

FN3. The court used standard Guidelines calculations giving plaintiff two, and defendant one of their children as deductions pursuant to the divorce judgment..  FN3. The court used standard Guidelines calculations giving plaintiff two, and defendant one of their children as deductions pursuant to the divorce judgment.

Carbonneau, John L., J.