Michele Decker v. Christopher Decker (2013)

MEMORANDUM OF DECISION

This action for dissolution of marriage was tried as a limited contested matter on July 2, 2013 and August 9, 2013.   Both parties were represented by experienced attorneys.   The court has carefully considered all of the evidence, statutory criteria, and common law pertaining to dissolution of marriage, the assignment of property and debts, and all of issues about which the court will enter orders.   The court finds the following facts and issues the following orders.

The plaintiff, Michele Decker, married the defendant, Christopher Decker, on October 30, 2006.   Her birth name was Morris.   The parties have resided in Connecticut during the course of the marriage.   Neither party has been the recipient of state or municipal assistance.   The marriage has broken down irretrievably, primarily because of the defendant's excessive use of marijuana at home and around the plaintiff's teenage daughter, and because of a disagreement over a tax liability caused by the defendant's failure to make the required quarterly payments from his business income.

The plaintiff is a hardworking woman who holds a steady job as a lab technician at the University of Connecticut Medical Center.   She has net weekly wages of $546.   She has additional income of $100 per week from rental of a room in her house at 151 Newfield Road in Winchester Center.   She also earns a small amount of extra money cleaning homes although her current earnings are unknown.   Based on her tax returns for 2008 and 2009, she has the capacity to earn roughly $100 per week in her spare time cleaning homes.   The plaintiff owned her house at the time of the marriage although its value at that time is unknown.   It has a current value of $145,000 offset by a mortgage of $88,500.

The defendant is an auto mechanic who is currently unemployed.   He was formerly in business with his brother but sold his interest in the business in March of 2012.   The defendant owned his interest in the business at the time of the marriage.   He used the proceeds of the sale to purchase and renovate a house at 34 Apple Street in Torrington.   The property has a value of $75,000 and is mortgage-free.   Prior to their marriage, the parties reached an agreement which said that the plaintiff waives any interest in the defendant's business with his brother, and the defendant agrees that any income received from the business shall be attributed to him for tax purposes.   Because the defendant's house was funded entirely from his share of the business, the court will not consider it as marital property subject to distribution.   The agreement regarding taxes will be discussed below.

The defendant claims that he spent substantial sums of his own time and money renovating the plaintiff's home and that he should be entitled to share in the equity in that home.   The court rejects this claim.   The renovations made by defendant are of questionable quality and there is no evidence to find that they increased the value of the house.

A major dispute in the case involves a 2005 Softail custom motorcycle which was assembled by the defendant immediately prior to the marriage.   The plaintiff claims that it was customized for her and that she paid in excess of $21,000 for the parts.   The defendant acknowledges that he built the motorcycle so that she could ride it, but denies that she paid for the parts.   He claims that he paid for the parts.   The motorcycle has never been ridden by the plaintiff and has never been registered.   The plaintiff has documentary evidence which gives some support to the plaintiff's testimony.   It is undisputed that the defendant provided all of the labor in the assembly of the motorcycle but there is no documentary evidence to support his claim that he paid for the parts.   The current value of the motorcycle is $14,000.

The defendant brought to the marriage a 2003 War Eagle Softail custom motorcycle with a current value of $12,500.   The parties own several other motor vehicles including:  a 2007 Qian–Vento motorcycle driven by the plaintiff with a value of $500 and a 1993 BMW driven by the plaintiff with a value of $2,380.   There is a Lexus driven by the defendant with a value of $18,000.   This vehicle was purchased with a loan taken by the plaintiff from her credit union.   The defendant has been making monthly payments on the loan and there is a balance due of roughly $6,000.   There is a VW Passat with a value of $6,500, a 2000 Audi with a value of $6,000, and a 1993 Toyota with a value of $1,300.

The other major issue involves the responsibility for a debt to the IRS resulting from the under-payment of federal income taxes in 2008 and 2009.   Although a great deal of time was spent trying to unravel this issue, the evidence remains murky.   There is no doubt that the defendant paid no quarterly taxes on his business income in 2008 and 2009 or any self-employment taxes for Social Security or Medicare.   The plaintiff paid Social Security, Medicare and withholding taxes on her employment income but none on her housecleaning income.   However, she did increase her income tax withholding to try to cover this deficit.   The parties filed joint returns in both years which showed taxes due of $7,902 in 2008 on an overall tax bill of $12,493.   The self-employment tax portion of the total tax was $5,259, the vast majority of which were for the defendant's unpaid Social Security and Medicare.   In 2009 the parties' tax return showed taxes due of $8,904 on an overall tax bill of $13,016.   The self-employment taxes were $6,830, the vast majority of which were for the defendant's unpaid Social Security and Medicare.   It is an inescapable conclusion of the court that all but a few hundred dollars of the IRS deficits in 2008 and 2009 were caused by the defendant's failure to pay quarterly taxes.   In addition to the taxes owed for these years, the IRS assessed penalties and interest of roughly $4,000.   Interest continued to accrue on the unpaid balance.

Sometime after their tax returns were filed, the parties made a payment of $5,500 toward the tax deficit but sharply disagree about where the money came from.   The plaintiff claims it came from a loan she took from her credit union.   There is evidence that the plaintiff took a loan for $5,500.   It is a reasonable inference that it was used to pay the IRS. The defendant claims he made the $5,500 payment from cash that he had accumulated in an envelope in his toolbox.   This story is not credible.   The court finds that the plaintiff made the $5,500 payment.

At about the same time, the plaintiff did the responsible thing and met with the IRS to reach an agreement on how to pay the taxes.   An agreement was reached under which the plaintiff would pay $252 per month from her checking account until the debt is paid.   The monthly payments of $252 have been made from the plaintiff's checking account since June of 2011, a period of 27 months.

After the plaintiff made her agreement with the IRS, the parties agreed that the defendant would pay the plaintiff an additional $200 per week to help offset her payments to the IRS. He stopped making these weekly payments when he moved out of the house in February of 2013.   Therefore he made payments from June 2012 to February 2013, a period of 35 weeks.   Therefore, the defendant made payments to the plaintiff of roughly $7,000.

In addition to her monthly payments to the IRS, the plaintiff's individual 2010 tax refund of $812 was paid to the IRS as well as the plaintiff's individual 2011 refund of $3,516.   Therefore, the plaintiff has paid at roughly $16,500 toward the IRS deficiency which was caused almost entirely by the defendant's failure to pay his quarterly taxes.   On her financial statement the plaintiff claims that there is a balance left of $6,019.67.   The evidence available to the court does not make it possible to confirm this number but it appears to be roughly accurate.¹

The parties own a hot tub which was purchased because the plaintiff had a prescription for it as a result of rotator cuff surgery.   The value is $1,250 and it is located at the defendant's home.

The plaintiff's proposed orders claim that there is $3,990 presently held in escrow by Attorney Jeannine Talbot although this is not reflected in either financial affidavit.   Nor do I recall any testimony about it.

Aside from the IRS debt, the plaintiff claims debts of $8,099 and the defendant claims debts of $14,474.

The court issues the following orders:

1. The marriage is dissolved.

2. The parties shall retain their respective houses free and clear of any claims from the other party.

3. Neither party shall pay periodic alimony.

4. Any funds held in escrow for the parties by Attorney Talbot shall be released to the plaintiff free and clear of any claim of the defendant.

5. The plaintiff shall become the sole owner of the following, free and clear of any claims of the defendant:  2005 Softail motorcycle;  the hot tub;  2007 Qian–Vento motorcycle;  the VW Passat;  the 1993 Toyota and the 2000 Audi. It is the intention of the court that the plaintiff may sell the Audi and the Toyota and use the proceeds to apply to the IRS debt.   The defendant shall become the sole owner of the Lexus but he is ordered to continue to pay the loan to the plaintiff's credit union and shall indemnify and hold the plaintiff harmless from liability on that loan.   The defendant may retain title to the 2003 Softail motorcycle.

6. As part of the property distribution, the defendant is ordered to pay the plaintiff the sum of $8,000 within 60 days from the date of this judgment.   If this sum is not paid in a timely manner, the plaintiff will be free to execute on the defendant's real and personal property in addition to other remedies.

7. The plaintiff shall continue to abide by her agreement with the IRS.

8. The parties shall pay the debts shown on their financial statements and shall indemnify and hold the other harmless.

9. The parties shall pay their own counsel fees.

BY THE COURT,

John W. Pickard

FOOTNOTES

FN1. The total tax due for 2008 and 2009 was $16,806 plus penalties and interest as of February 2013 of roughly $4,000.   Additional interest was accruing.   The plaintiff has paid $16,500..  FN1. The total tax due for 2008 and 2009 was $16,806 plus penalties and interest as of February 2013 of roughly $4,000.   Additional interest was accruing.   The plaintiff has paid $16,500.

Pickard, John W., J.