Gail Galazan v. Antony Galazan (2013)

MEMORANDUM OF DECISION RE PLAINTIFF'S (i) EMERGENCY MOTION TO EFFECTUATE JUDGMENT, POSTJUDGMENT 2/19/13 (233);  (ii) FIRST AMENDED EMERGENCY MOTION TO EFFECTUATE JUDGMENT, POSTJUDGMENT 4/1/13 (236);  (iii) MOTION FOR CONTEMPT 4/9/13 (238);  (iv) OBJECTION TO DEFENDANT'S MOTION FOR SANCTIONS 5/6/13 (247);  AND OBJECTION TO DEFENDANT'S “MOTION TO EFFECTUATE” 5/7/13 (249) AND DEFENDANT'S (i) OBJECTION TO PLAINTIFF'S APRIL 1, 2013 FIRST AMENDED EMERGENCY MOTION TO EFFECTUATE JUDGMENT—POSTJUDGMENT 4/15/13 (240);  (ii) MOTION TO EFFECTUATE JUDGMENT AND FOR ATTORNEYS FEES–POSTJUDGMENT 4/17/13 (242);  (iii) OBJECTION TO PLAINTIFF'S MOTION FOR CONTEMPT—POSTJUDGMENT 4/17/13 (243);  and (iv) MOTION FOR SANCTIONS—POSTJUDGMENT 5/2/13 (245)

The court conducted a hearing on the aforesaid motions on April 19, May 9 and June 9, 2013.   The court heard oral argument on July 27, 2013.   At oral argument, as set forth more particularly below, the plaintiff requested the court to order alternative equitable relief.

FINDINGS OF FACT

The parties' marriage was dissolved by judgment rendered on November 1, 2012 which incorporated by reference a Marital Settlement Agreement of even date therewith (the agreement) (218.50).   Pursuant to the agreement the parties were to list the marital residence for sale at a mutually agreed upon price and the defendant, who has exclusive use and possession thereof, was to pay the expenses in connection therewith.   Notwithstanding the foregoing, in the event the home was not sold by May 1, 2013, the plaintiff was required to contribute the sum of $2,800 a month towards the cost of the mortgage loan, real estate taxes and insurance premiums.   The total of the monthly contributions that were payable by the plaintiff were to be applied against the total property settlement due to the plaintiff.

The defendant's financial affidavit dated on or about November 1, 2012 valued the marital home at $1,800,000.   An appraisal prepared by R. Bruce Hunter having an effective date of October 23, 2012 valued the home at $1,700,000.   The plaintiff's financial affidavit dated November 1, 2012 valued the home at $2,800,000.

The parties were unable to agree on a listing price and, after a hearing on a motion filed by the plaintiff, the court ordered the home to be listed at a price of $2,500,000.   The home was listed on or about February 1, 2013 with William Raveis Real Estate, Inc. (Raveis) and the listing agent was Michelle Hollander.   The listing agreement provided, inter alia, that Raveis may also act as the agent for a buyer of the listed property thereby creating a Dual Agency.   Raveis is obligated under the listing agreement to promptly disclose all relevant information and to obtain consent agreements required by law.

The proceeds of the sale of the home are to be first applied to customary costs and then divided equally between the parties.   From the defendant's 50% share, he is to pay the sum of $172,000 to the plaintiff to equalize the marital equity of all real estate as they were allocated to the parties under the agreement.   Then, after the deduction of the $172,000, the defendant was to retain $250,000 from his share and the balance of this 50% share is to be paid to the plaintiff as defendant's non-taxable property settlement obligations due to her under the agreement.

On February 13, 2013, a prospective purchaser tendered an offer of $1,500,000.   The agent, in an email to the parties, advised that she thought such price was a “more than fair price.”   The price was not acceptable to the parties.   The plaintiff so advised the listing agent and informed the agent that a price of $2,000,000 would satisfy her.   The defendant did not respond to the offer.

On Friday, February 15, 2013 (i.e., within 48 hours of the initial offer), the listing agent advised the parties by email that the prospective purchaser made a “best and final offer.”   The communication of the offer from Ms. Hollander was made at 12:29 p.m. to counsel for the parties.   Attached to the communication was a purchase contract for the home with a purchase price of $1,700,000.   The offer did not include a mortgage contingency and required a minimal initial deposit.   The court has taken judicial notice of the fact that the next business day was Monday, February 18, 2013.   On Tuesday, February 19, 2013, the plaintiff filed her first motion to effectuate judgment.   The defendant had not responded to the offer to purchase prior to the filing of the motion.

Prior to the hearing on the first motion to effectuate judgment, the defendant advised the plaintiff that he would refinance the home and provide to the plaintiff the same amount of proceeds that she would have received had the $1,700,000 offer been accepted and the home sold at such price.   Ms. Hollander was informed of such proposal.   The defendant applied for and received a mortgage commitment in the amount of $1,150,000 (Exhibit C) in furtherance of his proposal.   As of the date of closing argument, the commitment had expired.

On March 29, 2013, Ms. Hollander sent to counsel for the plaintiff (and not to the defendant) another offer for the purchase of the property.   The court has taken judicial notice that March 29, 2013 was the Good Friday holiday.   The offer was made by a limited liability company—Ms.   Hollander subsequently confirmed the limited liability company was formed by the individual purchaser who had made the $1,500,000 and the $1,700,000 offers (the individual and his limited liability company are hereafter referred to as the purchaser).   The prior “final and best” offer of $1,700,000 was increased to $1,900,000 and the initial deposit amount increased to $190,000.   The offer remained free of a mortgage contingency and removed all previous contingencies thereby agreeing to accept the property “as-is.”

On or about 10:14 a.m. on April 1, 2013 the plaintiff's counsel sent a copy of the $1,900,000 offer to defendant's counsel.   The transmittal from plaintiff's counsel indicated that such counsel had not seen the offer until earlier in the day on April 1, 2013 due to the holiday and further that the plaintiff was willing to accept the same.

The defendant's counsel attempted to get in touch with Ms. Hollander to determine, among other things, if the limited liability company listed on the purchase agreement was owned by the prior identified purchaser or if it was a new bidder for the property and to ascertain why the offer had not been communicated directly to the defendant or his counsel.

Prior to hearing from Ms. Hollander, and approximately two hours after the email providing a copy of the $1,900,000 offer was sent to defendant's counsel, the defendant was served with the plaintiff's amended motion to effectuate judgment pursuant to which the plaintiff sought to have the court compel the defendant to accept the $1,900,000 offer.

The motion to effectuate also included further claims for relief seeking (i) an order transferring the property to the plaintiff to effectuate the sale;  (ii) attorneys fees;  and (iii) other and further relief as the court deems equitable and appropriate.

The court finds the timing of the filing of the motion precluded the ability of the parties to together negotiate with the purchaser.

The court finds that during the hearing on the motions, the plaintiff introduced two appraisals prepared during 2013 which valued the property in excess of $1,900,000.

Later on April 1, 2013, Ms. Hollander responded to counsel for the defendant indicating she had tried to send the contract to both parties on March 29, 2013 but had been unsuccessful in doing so.   She then provided a copy of the offer.   It was not until April 2, 2013 that she confirmed the ownership of the purchaser to the defendant.

Despite the various offers and communications between Raveis and the parties, the defendant was not advised until April 9, 2013 that Michelle Hollander was in fact also acting as the agent for the buyer and that Raveis considered a Dual Agency to be in place.   As of the date of April 15, 2013, the defendant has not signed a Dual Agency agreement.   The defendant appears to argue that the action of the agency somehow affects the offer and his ability to accept or reject the same.¹  The court finds, however, the aforesaid is not relevant to the issue before the court.   During the hearings on the pending motions, there was a valid purchase offer for the marital home.   At some point thereafter, but prior to closing argument, the offer was rescinded.

The court finds the plaintiff demonstrated excessive zeal in filing a motion seeking to compel the defendant to accept an offer of $1,700,000 when a subsequent offer was made at $1,900,000.   The plaintiff acknowledged, in hindsight, it was not unreasonable of the defendant to refuse the $1,700,000 offer.   The court agrees and finds the plaintiff did act unreasonably in the timing of the filing of both of her motions to effectuate the judgment.

On April 9, 2013, the plaintiff filed the motion for contempt alleging the defendant had unreasonably hindered efforts by the agent and the plaintiff to sell the house.   Ms. Hollander testified that the defendant bullies her.

The court did not find most of Ms. Hollander's testimony to be credible.²

On April 17, 2013, the defendant filed his motion to effectuate judgment seeking an order from the court awarding the property to him and ordering that he refinance the mortgage on the property to free up sufficient funds to provide to the plaintiff the amount of proceeds she would have received if the court granted her first emergency motion to effectuate the judgment and the property had been sold to the purchaser at $1,700,000.

On May 7, 2013, the plaintiff filed an objection to the defendant's motion to effectuate the judgment in which the plaintiff avers that (i) “defendant not only ignores the language of the parties' November 1, 2012 separation agreement, which requires the parties to sell the property ․” and (ii) court lacks subject matter jurisdiction and statutory authority to enter postjudgment orders that alter property distribution orders.

On or about April 2, 2013, the plaintiff had a subpoena served on Savings Bank of Danbury (Danbury) seeking production of materials submitted by the defendant to Danbury in connection with his efforts to obtain a loan from Danbury to provide him with the funds to acquire the interest of the plaintiff in the marital home.   A copy of the subpoena was served on the defendant.

Neither the defendant nor Danbury filed a motion to quash or a motion for protective order in connection with the subpoena.   Danbury produced the subpoenaed documents and provided them directly to counsel for the plaintiff and such counsel advised the representative of Danbury that, at least initially, no one need appear at the hearing before the court and that Danbury would be notified if, indeed, the attendance of a bank representative was required.

At a hearing on the pending motions, plaintiff introduced a document that had been provided to her by Danbury;  the document was admitted into evidence without objection prior to the disclosure by plaintiff's counsel that such document had been delivered to him by Danbury in response to the subpoena.   Only after the document was admitted did plaintiff's counsel acknowledge receipt of the package of documents from Danbury and the fact that he had opened it prior to coming to court.

On May 2, 2103, the defendant filed a motion for sanctions against plaintiff's attorney for improper use of subpoena power.

APPLICABLE LAW AND FURTHER FINDINGS

As the offer at $1,900,000 has been withdrawn, the plaintiff's request that the court effectuate the judgment by compelling the acceptance of the offer is moot.   Despite the averment in her objection to the defendant's motion to effectuate judgment that the agreement requires a sale, the plaintiff has not withdrawn her motion to effectuate the judgment and seeks to have the court order the defendant to pay to her the amount of proceeds she would have received if the offer of $1,900,000 had been accepted and the property sold at that number.

In addressing a post-judgment motion to effectuate a judgment, the court is required to conduct an evidentiary hearing because due process requires that any order be based on findings of fact.   See Roberts v. Roberts, 32 Conn.App. 465 supra, 32 Conn.App. 473–76.  “[T]he trial court [has] to garner evidence in [a] contested matter in order to determine the best way to effectuate the original judgment.”  Id., 474.

The division of property is governed by General Statutes § 46b–81.  “At the time of entering a decree ․ dissolving a marriage ․ the Superior Court may assign to either the husband or wife all or any part of the estate of the other ․” General Statutes § 46b–81(a).  “Accordingly, the court's authority to divide the ․ property of the parties, pursuant to § 46b–81, must be exercised, if at all, at the time that it renders judgment dissolving the marriage.”  Rathblott v. Rathblott, 79 Conn.App. 812, 819 (2003).   “[T]he statute ․ enables the trial court to transfer property in a marital dissolution action, [but] does not [provide for the court to] retain continuing jurisdiction over any portion of the judgment that constitutes an assignment of property ․ Therefore, a property division order generally cannot be modified by the trial court after the dissolution decree is entered ․” (Citations omitted;  internal quotation marks omitted.)   Blaisdell v. Blaisdell, Superior Court, judicial district of New London at Norwich, Docket No. FA 00 0121221 (October 3, 2001, Swienton, J.) (30 Conn. L. Rptr. 543, 543–44).   “Connecticut courts have repeatedly recognized both explicitly and implicitly that an order for the sale of property in a dissolution judgment is a nonmodifiable assignment.”  Roberts v. Roberts, 32 Conn. App 465, 469 (1993).

“Although the court does not have the authority to modify a property assignment, a court, after distributing property, which includes assigning the debts and liabilities of the parties, does have the authority to issue postjudgment orders effectuating its judgment.”  (Internal quotation marks omitted.)  Fewtrell v. Fewtrell, 87 Conn.App. 526, 531 (2005);  Arenholz v. Arenholz, Superior Court, judicial district of Fairfield, Docket No. FA 00 0377731 (January 10, 2013, Owens, J.T.R.) (“court lacks authority under General Statutes § 46b–81 to issue postjudgment orders regarding the modification of the distribution of property, unless the party's postjudgment motion seeks to effectuate a term of the dissolution judgment”).  “Where a decision as to whether a court has subject matter jurisdiction is required, every presumption favoring jurisdiction should be indulged ․ Thus, if the ․ motion ․ can fairly be construed as seeking an effectuation of the judgment rather than a modification of the terms of the property settlement, this court must favor that interpretation.”  (Internal quotation marks omitted.)   Fewtrell v. Fewtrell, supra, 532;  see Santoro v. Santoro, 70 Conn.App. 212, 217, 797 A.2d 592 (2002) (“[i]f a party's motion ‘can fairly be construed as seeking an effectuation of the judgment rather than a modification of the terms of the property settlement, [the] court must favor that interpretation’ ”);  Jacobs v. Jacobs, Superior Court, judicial district of Hartford, Docket No. FA 95 0710220 (October 9, 2012, Olear, J.) (54 Conn. L. Rptr. 785, 786) (“[b]y filing a motion to effectuate judgment, the plaintiff cannot attempt to modify the property division as set forth in the judgment”).

“It is ․ within the equitable powers of the trial court to fashion whatever orders [are] required to protect the integrity of [the] [original] judgment.”   (Internal quotation marks omitted.)  Santoro v. Santoro, supra, 70 Conn.App. 217.  “The purpose of a property division pursuant to a dissolution proceeding is to unscramble existing marital property in order to give each spouse his or her equitable share at the time of dissolution.”  Smith v. Smith, 249 Conn. 265, 275 (1999).

In Roberts v. Roberts, supra, 32 Conn.App. 466, the court addressed the issue of whether the trial court had jurisdiction to order a sale by auction to effectuate a judgment that provided only that the marital residence was to be sold and the proceeds to be split evenly between the parties.   The Appellate Court held that the trial court's order to auction the property effectuated the original judgment despite the fact that the original judgment did not call for sale at auction.  Id. The court explained that “[t]he parties still would split the proceeds of the sale equally ․ [t]he motion seeks only to effectuate the judgment by asking the court to determine how the property will be sold ․ [T]he [trial] court's order for sale of the marital property by auction does not interfere with the terms of the stipulated judgment in any way.   Both parties continue to be entitled to 50 percent of the proceeds of the sale ․” (Citations omitted.)  Id., 471–72.

In Falkenstein v. Falkenstein, 84 Conn.App. 495, cert. denied, 271 Conn. 928 (2004), the Appellate Court held that the trial court had the authority, post-judgment, to enter an order barring either party from purchasing the marital residence.   In that case, both the husband and wife filed post-judgment motions seeking to have the court order the other party to sell his or her interest in the marital residence to the other at the price ordered by the court.   The trial court denied both motions and the plaintiff appealed, arguing that the court lacked the authority to deny her motion to order the defendant to sell his equity in the marital home to her.   The Appellate Court interpreted General Statutes § 46b–81, noting that its purpose is:

[T]o grant the trial court authority to disperse the marital estate, including the real property.   The court may order that title to real property pass to either party or to a third party or it may order the sale of the real property.   The court therefore has the authority under the statute to pass title to one of the parties or to neither of the parties because it may transfer it to a third party.   Implicit in that authority is the authority to bar one or both of the parties from participating in the sale.   The court's discretion is to be guided by its judgment in how to carry into effect the dissolution decree.

Id., 502.   In upholding the trial court's decision, the Appellate Court noted that the trial court did not abuse its discretion and did not act inequitably, noting that the basis of the trial court's decision was “the need to bring the [prolonged] dissolution litigation to an end.”  Id., 504.

The court finds that this situation differentiates itself from the facts in the Roberts matter.   In Roberts, the court in ordering an auction was effectuating a sale to a third party—albeit by an auction in lieu of a sale pursuant to a negotiated contract for sale.

The court finds this case to be analogous to Falkenstein.   While the court is desirous of ending the prolonged litigation between these parties the court finds it does not have the jurisdiction to enter an order modifying the property orders entered at the time of dissolution.   The agreement of the parties which was approved and ordered by the court requires the sale of the property.

Accordingly, the court denies the motion of the defendant to effectuate the judgment and the oral request of the plaintiff that the court order the defendant to effectuate the judgment by providing proceeds to the plaintiff in an amount equivalent to that which she would have received had the sale at $1,900,000 closed.

The property is to be sold to a third party as required by the agreement in accordance with the orders set forth below which are entered to effectuate the judgment.   See O'Halpin v. O'Halpin, 144 Conn.App. 671 (2013).

As to the plaintiff's motion for contempt and the defendant's objection thereto, as noted above, the plaintiff moved with excessive zeal to compel the defendant to accept an offer on the property at a price of $1,700,000 and then subsequently almost immediately filed the amended motion to compel upon her receipt of the $1,900,000 offer.   Further, throughout the course of the “negotiations” for the sale of the home, the defendant was unable to obtain full and frank disclosure from Ms. Hollander of the nature of her representation of and/or contact with the proposed purchaser.

It is clear that the inability of the parties to get on the same page has hampered the sale of the property.   Their lack of communication and cooperation has resulted in a total and complete failure to conduct a “give and take” negotiation with each other and with the proposed purchaser.

For the myriad of reasons set forth throughout this memorandum, the court denies the motion for contempt and sustains the objection thereto.

As to the motion for sanctions, the plaintiff argues that General Statutes § 36a–43 applies and that therefore the defendant may not complain or seek sanctions in the event Danbury inappropriately provided financial material.³

The court disagrees.   It is undisputed that the defendant did not seek to quash the subpoena and he does not complain of Danbury's production of the material—he complains of the handling of the produced documents by counsel for the plaintiff.

As a result of discussions between Danbury and plaintiff's counsel, documents were sent directly to the counsel for the plaintiff.   The defendant did not have the opportunity to view the production before it was brought to the court by plaintiff's counsel.

In this case, much like in McCarty v. McCarty, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. FA01–0387527 (January 22, 2003, Hiller, J.) (2003 Ct.Sup. 1744) [34 Conn. L. Rptr. 67], plaintiff's counsel advised Danbury, but not the defendant, that a representative of Danbury need not attend the hearing to provide the subpoenaed documents.   Danbury accepted this proposal and sent the documents directly to the plaintiff.

The question now presented is whether, in this post-judgment action, the plaintiff's counsel should be sanctioned for his method of obtaining financial records, i.e., whether such actions violated the rules of practice or statutes, and if so, whether sanctions would be appropriate.   As in McCarty important to the resolution of these issues is the nature of the documents at issue.   The documents at issue are not medical or employment records which are privileged and protected.

The records at issue were financial documents related to the defendant's efforts to obtain funds to permit him to “effectuate the judgment.”   These records were, in this matter, basic to and necessary for both the parties and the court.   They were itemized in the subpoena served on defendant's counsel and no objection to the deposition or motion to quash the subpoena was filed.

Plaintiff's counsel should have (i) alerted the defendant that he advised Danbury that their attendance at the hearing was not initially required;  (ii) advised the defendant of the receipt of the subpoenaed documents, (iii) provided copies to the defendant of the documents delivered by Danbury after receipt of the same;  and (iv) avoided using them without either an authorization from the defendant or permission from the court.   Failure to do so contravened and circumvented the rules of discovery and was improper.   However, in light of the history of this case and the nature of the materials at issue, the court does not believe that sanctions are appropriate.   As in McCarty, a caution and a warning, however, certainly are warranted and hereby given.

For all the above reasons, the defendant's motion for sanctions is denied.

In all, or nearly all, of the pending motions and responsive pleadings, both parties have requested counsel fees.

For all of the reasons set forth above, all requests for counsel fees are denied.

ORDERS

1. Motion 233 is moot.

2. Motion 236 is moot, in part and denied, in part.   The court declines to order the transfer of the property from the defendant to the plaintiff as the court has found the plaintiff acted unreasonably in seeking emergency orders to effectuate the judgment and thereby denying the defendant the ability to respond and attempt to negotiate the purchase offers.   The objection (240) is sustained, in part, and denied, in part.

3. Motion 238 is denied and the objection (243) is sustained.

4. Motion 242 is denied and the objection (249) is sustained.

5. Motion 245 is denied.   The objection (247) is noted.

6. If the contract with Raveis has expired, the parties shall list the property with another agency and if the parties cannot agree, the court shall appoint an agency.

If the contract with Raveis continues, then the property shall be listed with Raveis through the duration of the contract, and then a new listing with another agent shall occur.

The home shall be listed at $2,500,000.   If an offer is not accepted for the home within thirty days, the listing price shall be reduced to $2,350,000.   If an offer is not accepted for the home within thirty days of the reduction, the listing price shall be further reduced to $2,225,000 and thereafter the listing price shall be reduced every forty-five days by 5%.

The parties shall cooperate with each other and the agency.   At such time as an offer or counteroffer is received, each party shall respond to the agent within forty-eight hours with an acceptance or counteroffer to each offer.   It is the fervent hope of the court that the parties realize it is in their best interest (singularly and collectively) to respond in a civil and productive manner with the goal being an orderly sale of the house.

SO ORDERED.

BY THE COURT,

Olear, J.

FOOTNOTES

FN1. If the defendant (and perhaps the plaintiff) has been damaged by the acts or omissions of Raveis and/or any of its agents or brokers, is not for this court to determine..  FN1. If the defendant (and perhaps the plaintiff) has been damaged by the acts or omissions of Raveis and/or any of its agents or brokers, is not for this court to determine.

FN2. For example, the court does not find credible Ms. Hollander's claim that she reviews the company's policies every time she does a new listing..  FN2. For example, the court does not find credible Ms. Hollander's claim that she reviews the company's policies every time she does a new listing.

FN3. General Statutes § 36a–43 provides in part as follows:  “[a] customer of a financial institution shall have standing to challenge a subpoena of the customer's financial records, by filing an application or motion to quash in a court of competent jurisdiction.”.  FN3. General Statutes § 36a–43 provides in part as follows:  “[a] customer of a financial institution shall have standing to challenge a subpoena of the customer's financial records, by filing an application or motion to quash in a court of competent jurisdiction.”

Olear, Leslie I., J.