Cheryl Abbott Olson v. Brian Matthew Olson (2013)

MEMORANDUM OF DECISION

The parties have filed several post judgment motions.   The factual and procedural history is as follows.   On November 19, 2009, the parties entered into the equivalent of a separation agreement.   On December 16, 2009, the parties were divorced pursuant to a decree of dissolution, with the separation agreement being incorporated therein.   The decree was amended as an absolute decree on January 29, 2010 in the United Kingdom, City of London.   The foreign judgment of dissolution was domesticated in the state of Connecticut on March 4, 2010 under the principle of comity.   With respect to the plaintiff's motion for contempt (# 112.01) and motion for modification (# 112.02), the pertinent provisions of the parties' separation agreement are as follows:

Paragraphs 2a and b, which state:  “The Respondent do pay or cause to be paid periodic payments to the Petititoner:  (a) of such amount as is necessary for her to receive $40,000 per annum net of income (as defined point 10 in the preamble to this order) payable monthly in advance from the first day of the calendar month immediately following the date of this order during their joint lives or until the Petitioner's remarriage or further order, together with (b) such amount as shall equal 25% of the cash element of the bonus he is awarded by his employers (net of any tax liability incurred by the Respondent) in each of the years 2010, 2011, 2012 and 2013 each such payment to the Petitioner to be made within 21 days of receipt by the Respondent of each bonus payment.”

Paragraph 2(d) which states.  “Either party will remain at liberty during the continuation of the periodical payments to apply for an upward or downward variation or termination or capitalization of such maintenance.”

Paragraph 11, which states:  “He will within 21 days of receipt supply the Petitioner with documentary evidence of the cash element of his bonus payment in April each year from 2010 to 2014 inclusive, together with documentary evidence of the tax payable on that element of his bonus.”

In her motion for contempt, the plaintiff allegations are twofold.   First, the plaintiff alleges that the defendant willfully failed to pay her court ordered additional alimony payments from the cash bonuses he received in years 2010 and 2011 from his employer Barclays Capital.   Second, the plaintiff alleges that the defendant willfully failed to supply her with reasonable and necessary documentary evidence of his receipts of the cash element of such bonuses except for two nonverifiable documents from his employer.   At a hearing held on April 9, 2013 and on May 29, 2013, the court heard testimony and received evidence.   Based upon the relevant evidence presented, the court makes the following additional findings of fact.

During the hearing, the plaintiff testified that it was parties' understanding at the time of the entry of the separation agreement that the defendant would be earning a salary of $200,000 per year and that she would be entitled to receive 25% of any additional money above and beyond his $200,000 salary.   The plaintiff testified that the defendant received a bonus of $175,000 in years 2010, 2011, 2012 and 2013,¹ that the defendant failed to provide her with 25% share of his bonuses, that her alimony and child support order was based on the defendant's $200,000 compensation and, lastly, that the defendant willfully failed to provide her with court-ordered documentary evidence of the bonuses he receives as evident by his employer's actual letterhead.   The plaintiff further testified that the United Kingdom equivalent of the defendant's financial affidavit and his employment contract also represented that the defendant's base salary was $200,000 per year and that any other compensation he receives would be considered a discretionary bonus.²  The defendant testified that he was notified of a company-wide change in his employer's compensation structure in late December of 2009 and believes he shared this information with the plaintiff.   Since that change went into effect, the defendant's employer began to pay him what his employer calls an “additional fixed payment” of $175,000 per year that is paid bi-weekly like his regular base pay.³  The defendant is still eligible for a discretionary bonus, too.   According to his testimony, the defendant received what his employer described as a “cash bonus” of $100,000 in 2012 and he paid the plaintiff 25% of the after tax amount that he received in his checking account resulting from the net remaining from said “cash bonus.”

The crux of the problem presented by this motion essentially turns the interpretation of the operative terms and conditions contained in the separation agreement.  “Our Supreme Court has instructed that interpretation of a separation agreement incorporated into a dissolution decree is guided by the general principles governing the construction of contracts.”  (Internal quotation marks omitted.)  Nassra v. Nassra, 139 Conn.App. 661, 667 (2012).  “A contract must be constructed to effectuate the intent of the parties ․ [T]he intent of the parties is to be ascertained by a fair and reasonable construction of the written words and ․ the language used must be accorded its common, natural, and ordinary meaning and usage.”  (Internal quotation marks omitted.)  Hammond v. Hammond, 145 Conn.App. 607, 612 (2013).  “When the language of a contract is ambiguous, the determination of the parties' intent is a question of fact ․” Id. “[T]he intent of the parties is to be ascertained by a fair and reasonable construction of the written words and ․ the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the contract ․ Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms.   A court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity ․ Similarly, any ambiguity in a contract must emanate from the language used in the contract rather than from one party's subjective perception of the terms.”  (Internal quotation marks omitted.)   Nassra v. Nassra, supra;  accord Eckert v. Eckert, 285 Conn. 687, 692, 941 A.2d 301 (2008);  Isham v. Isham, 292 Conn. 170, 180–81, 972 A.2d 228 (2009).

With these established legal principles in mind, the court begins its analysis.   The separation agreement of the parties was incorporated into the judgment of dissolution.   Therefore, the separation agreement is a contract between the parties and the law of contract construction applies.   The court next turns to the threshold inquiry of contract interpretation by reviewing the parties' dissolution contract.   Upon examination of the separation agreement, the court finds that the terms and conditions contained in the pertinent paragraphs are clear and unambiguous when reading the separation agreement as an integrated whole and that there simply is no room for more one reasonable interpretation of the salient terms.   In support of her position, the plaintiff cited several cases including the case of Silver v. Silver, 170 Conn. 305, 365 A.2d 1188 (1976), in support of her position.   Like Silver, the parties' separation agreement does not define the word “bonus.”   Our supreme court in Silver noted that “ ․ Webster's Third New International Dictionary defines bonus to mean ‘something given or received that is over and above what is expected.’  Id. at 307.   Although the separation agreement is devoid of a definition for the term “bonus,” the record reflects that the defendant's employer has been paying him both his base compensation of $200,000 per year and, since 2010, an “additional fixed pay” of $175,000 on a bi-weekly basis.   The combination of these two figures were paid to the defendant by his employer consistently in 2010, 2011, 2012 and presently.   The singular exception during that time period was in 2012, which is when the defendant's employer gave him a check for $100,000 that his employer labeled a “cash bonus.”   That sum constituted the “cash element of a bonus” according to the intent manifested by the parties' use of such wording in their separation agreement.   Looking at the definition of the term “bonus” from the Silver case, it also falls squarely within that meaning.   Moreover, it was a sum that was over and above the pay the defendant could expect to receive bi-weekly.   The court finds the defendant's testimony to be credible, the evidence uncontroverted and expressly rejects all of the extrinsic evidence offered by the plaintiff.

The second allegation in the plaintiff's motion for contempt claims that the defendant willfully failed to provide her with documentary evidence of his receipt of the cash element of his bonus payment and taxes payable of said bonus within 21 days of receipt of said bonus.   The plaintiff testified that she asked the defendant for documentary evidence of his receipt of the cash element of his bonus each year from 2010 to 2014,⁴ and she received three letters from his employer, Barclays Capital ⁵ but not his tax returns or year-to-date pay statement for those years and had to serve a subpoena to obtain other documents relative to this information.   The defendant testified that he sent the plaintiff a copy of his earning statement that reflected the $100,000 cash bonus he received in 2012 and the net amount of $61,246.31 that was paid to him by way of direct deposit into his checking account.⁶  Again, applying the principles of contract interpretation as set forth above, the court reviewed paragraph 11 of the separation agreement.   The court finds that the language to be clear and unambiguous and that it requires the defendant to provide the plaintiff with “documentary evidence” of his receipt of the cash element of his bonus and his tax liability for cash bonus even though it contains no description of the type of documentary evidence that he is obligated to produce.   Nonetheless, giving the words “documentary evidence” their ordinary meaning in common parlance, the court further finds that the physical proof required to be shown by the defendant to the plaintiff of his cash bonus and his tax liability on such bonus is not limited to the plaintiff's narrow and subjective view of the instruments that would satisfy her own personal preferences either by way of style, format or substance.   The parties' use of the term “documentary evidence” suggests that they intended to convey a wide degree of flexibility concerning what instruments would be acceptable.   If the parties intended for the defendant to give the plaintiff the specific documents she asked for, then they would have expressly so provided in their separation agreement.

As for whether the plaintiff has met her burden of proving willful contempt on the part of the defendant, the court sets forth the general rule of law for establishing contempt.

“Contempt is a disobedience to the rules and orders of a court which has power to punish for such an offense.”  (Internal quotation marks omitted.)  In re Leah S., 284 Conn. 685, 692, 935 A.2d 1021 (2007).   The movant has the burden of proof to show, by a preponderance of the evidence, the existence of a court order and noncompliance with that order.  Issler v. Issler, 50 Conn.App. 58, 66–69, 716 A.2d 938 (1998).  “Noncompliance alone will not support a judgment of contempt.”  Prial v. Prial, 67 Conn.App. 7, 15, 87 A.2d 50 (2001).   Moreover, “a court may not find a person in contempt without considering the circumstances surrounding the violation to determine whether such violation was willful.”  (Internal quotation marks omitted.)  Wilson v. Wilson, 38 Conn.App. 263, 275–76, 661 A.2d 621 (1995).   In any contempt, the underlying court order must have been sufficiently clear and unambiguous so as to support a judgment of contempt.   The court must find that there was a violation of said order and that the violation was willful.   Finally, the court must find that the willful violation of the clear and unambiguous order was not excused by a good-faith dispute or misunderstanding.  In re Leah S., supra, 284 Conn. 685, 693–94 (2007).  “[E]ven in the absence of a finding of contempt, a trial court has broad discretion to make whole any party who has suffered as a result of another party's failure to comply with a court order.”  (Emphasis omitted;  internal quotation marks omitted.)  Fuller v. Fuller, 119 Conn.App. 105, 115, 987 A.2d 1040 (2010).   Even though a party's actions did not constitute contempt, a court's remedial orders are well within its general remedial discretion.  Fitzgerald v. Fitzgerald, 16 Conn.App. 458, 553, 547 A.2d 1387 (1988).

The court finds that the defendant complied with the order by providing the plaintiff with documentary evidence showing the amount of cash bonus he received in 2012 along with the taxes that were withheld from said payment when he sent her his earning statement for the period in question.   Undoubtedly, the defendant did not give her the documentary evidence she believed she was entitled to, but he provided her with the information that was in compliance with the court order.

Based upon the relevant and credible evidence presented, the demeanor of the parties, the court's examination of the applicable sections of the separation agreement and review of the applicable law, the court denies the plaintiff's motion for contempt (# 112.01) on the ground that the plaintiff failed to sustain her burden of proof.   As for the plaintiff's motion for modification (# 112.02), the plaintiff requests a modification of the court ordered alimony under paragraph 2(d) of the parties' separation agreement based on a substantial change in circumstances.   Upon reviewing the plaintiff's pleading, the court denies the plaintiff's motion for modification on the grounds that the plaintiff failed to state the specific factual and legal basis for the claimed modification in accordance with Practice Book § 25–26(e), failed to provide the court with the applicable substantive law of the controlling jurisdiction and failed to provide the court with currency conversion calculations.   The court further denies her request for attorneys fees as no such request was filed with the court either by separate motion or stated as a part of the plaintiff's request for relief in said motion.

The court turns next to the plaintiff's motion for order re:  taxes, postjudgment (# 122.00), and the defendant's motion for order, postjudgment (# 129), which will be addressed together as the evidence pertaining to both motions ⁷ was either heard or introduced, as the case may be, simultaneously.   Each party disagrees with the calculation the other used to determine the plaintiff's one-half share of the net proceeds from the defendant's sale of Barclays ⁸ stock in 2010 and 2011.   Under paragraph 2, clause II of the relevant portion of the separation agreement, it states “[i]mmediately on the sale of all or part of the deferred shares in his name with Barclays as set out on Schedule A attached hereto he will account to Petitioner for one-half of the net proceeds (being gross proceeds of sale less all taxes and costs of sale less all taxes and costs of sale/realization which may apply) and provide documentary evidence of the same, and the tax liability and any costs/charges that arise on such sale or sales.”   Prior to the commencement of the hearing, the parties entered into several stipulations on the record as follows:

1. The plaintiff's entire federal and New York State tax returns for 2010 and 2011 would be offered as a full exhibit.

2. The qualifications of both expert witnesses;  plaintiff's expert, John T. Dougherty, CPA, and defendant's expert, James P. Tucciarone, CPA.

3. Reports prepared by the parties' respective expert witnesses would be offered as a full exhibit.

4. For 2010, the gross amount of Barclays stock was $797,184 and the amount paid to the plaintiff was $235,350.

5. For 2011, the gross amount of Barclays stock was $1,477,000 and the amount paid to the plaintiff was $419,202.

The plaintiff's expert testified that he reviewed the applicable section of the parties' separation agreement, which entitled the plaintiff to receive 50% of the net proceeds of the defendant's sale of Barclays stock in years 2010 and 2011, including the specific language contained therein that contained a formula for the purpose of calculating the plaintiff's net share.   The plaintiff's expert further testified that he reviewed the report prepared by the defendant's expert and found differences between their respective methodologies.   In doing so, the plaintiff's expert identified several discrepancies between the two methodologies and calculations.   The defendant's expert testified that it was his opinion that the defendant is owed $31,946 as an overpayment to the plaintiff of her share of the 2011 Barclays stock.   He further testified that it is his opinion that the defendant owes the plaintiff $8,254 for her share of the 2011 Barclays stock.   First, the defendant's expert removed the foreign tax credits that the defendant was allowed to claim on his federal tax returns.   Second, the defendant's expert did not calculate the defendant's alternative minimum tax for 2011 when the defendant was already subject to paying taxes under the alternative minimum tax rate for the previous tax year.   The defendant's expert testified about how he determined what the total tax liability was on the plaintiff's share of the Barclays stock was and his basis for the one-half reduction from the net proceeds of the sale of said stock.   During his direct examination, colloquy between the counsel for the defendant and the defendant's expert reveals several actual or potential mistakes made by the defendant's expert in his calculations when comparing his methodology to that of the plaintiff's expert.⁹

Under cross examination, the defendant's expert testified that his calculations did not apply any foreign tax credits available to the defendant and that his methodology in this regard is based on what the defendant would have paid in taxes had he not used said credits.   Nonetheless, the defendant's expert's opinion was that the methodology he used in calculating the plaintiff's share of the net proceeds of the defendant's sale of 2010 and 2011 Barclays stock award.   Likewise, the plaintiff's expert held the same opinion.   In examining paragraph 2 of the separation agreement and considering the evidence, including the opinions of the expert witnesses, the court finds that the testimony and opinions of the plaintiff's expert witness to be credible and that the plaintiff sustained her burden of proof by a preponderance of the evidence.   Consequently, the court grants the plaintiff's motion for order re taxes, postjudgment, only as follows:

1. The court orders the defendant to pay $8,552.00 to the plaintiff within 7 business days of the day of this decision, which amount represents the plaintiff's share of the 2010 Barclays stock.

2. The court orders the defendant to pay $184,479 to the plaintiff within 30 business days from the date of this decision, which amount represents the plaintiff's share of the 2011 Barclays stock.

The court has reviewed the plaintiff's claims for relief in connection with her motion for order re:  taxes.   In addition to the foregoing, the plaintiff is requesting attorneys fees incurred plus an order for statutory interest pursuant to General Statutes § 37–3a (citing the case of Sosin v. Sosin, 300 Conn. 205, 14 A.3d 307 (2011) on the ground that the defendant's failure to pay the plaintiff the sums above was wrongful.   However, the court denies the plaintiff such further relief.   The plaintiff failed to sustain her burden of proof by not providing the court with any evidence showing that the applicable substantive law of the controlling jurisdiction allows for the award of attorneys fees and statutory interest pursuant to Connecticut law as claimed.

The next pleading the court will address is the defendant's motion for modification of alimony, postjudgment (# 123.01).   In his motion, the defendant alleges that the plaintiff has been living with another person and this cohabitation has resulted in a change in circumstances of the parties under General Statutes § 46b–86(b).  Although the court heard testimony about the nature of the plaintiff's relationship with her boyfriend, the defendant did not provide the court with any evidence of the applicable substantive law of the controlling jurisdiction that would permit the modification of alimony on the basis of a showing of cohabitation or a substantial change of circumstances pursuant to Connecticut law.   Consequently, the court denies the defendant's motion for modification of alimony, postjudgment, on the ground that the defendant failed to sustain his burden of proof.

The court also denies the defendant's request for attorneys fees and for interest associated with the plaintiff's motion for order re taxes, post-judgment as no such request was filed with the court by separate motion.

BY THE COURT

SYBIL V. RICHARDS, JUDGE

FOOTNOTES

FN1. The court is aware that the plaintiff's motion for contempt, which mentions the additional fixed payments for years 2010 and 2011, is at odds with her testimony, which references years 2010 through 2013.   However, this discrepancy is of no moment given the court's decision..  FN1. The court is aware that the plaintiff's motion for contempt, which mentions the additional fixed payments for years 2010 and 2011, is at odds with her testimony, which references years 2010 through 2013.   However, this discrepancy is of no moment given the court's decision.

FN2. The plaintiff cites two sections of the defendant's March 23, 2009 employment contract with Barclays, which provides as follows:“Base Salary:  For all periods of active employment with the company, you will be paid a base salary at the rate of $200,000 per annum.”Discretionary Bonus Program:  “You will be eligible to be considered for a discretionary year-end bonus for the 2009 performance year.   Such bonus may be in the form of cash and/or conditional equity-based awards, in accordance with the terms then in effect of the Equity Participation Program (the “EPP”) or such other equity or other deferred compensation plan as may be established by the Company from time to time.   The payment and amount of bonus compensation (if any) for the year is within the sole and absolute discretion of Barclays.   To be eligible for a bonus, you must be in Active Working Status at the time the bonus is paid.   Bonuses typically are paid in the first quarter of the year following the end of a performance year (ending December 31).   Barclays may decline to award a bonus in its sole and absolute discretion or to change the timing and nature of any bonus at any time.  (Emphasis added.)   You will also be eligible to participate in the Barclays discretionary bonus program in future years, provided you remain in Active Working Status through the applicable payment date.   The payment and amount, if any, of future bonus compensation for any year, whether in the form of cash and/or equity-based awards, is within the sole and absolute discretion of Barclays.”.  FN2. The plaintiff cites two sections of the defendant's March 23, 2009 employment contract with Barclays, which provides as follows:“Base Salary:  For all periods of active employment with the company, you will be paid a base salary at the rate of $200,000 per annum.”Discretionary Bonus Program:  “You will be eligible to be considered for a discretionary year-end bonus for the 2009 performance year.   Such bonus may be in the form of cash and/or conditional equity-based awards, in accordance with the terms then in effect of the Equity Participation Program (the “EPP”) or such other equity or other deferred compensation plan as may be established by the Company from time to time.   The payment and amount of bonus compensation (if any) for the year is within the sole and absolute discretion of Barclays.   To be eligible for a bonus, you must be in Active Working Status at the time the bonus is paid.   Bonuses typically are paid in the first quarter of the year following the end of a performance year (ending December 31).   Barclays may decline to award a bonus in its sole and absolute discretion or to change the timing and nature of any bonus at any time.  (Emphasis added.)   You will also be eligible to participate in the Barclays discretionary bonus program in future years, provided you remain in Active Working Status through the applicable payment date.   The payment and amount, if any, of future bonus compensation for any year, whether in the form of cash and/or equity-based awards, is within the sole and absolute discretion of Barclays.”

FN3. The court finds the letters from the defendant's employer stating that the defendant was not paid a bonus in 2010, 2011 or 2012 to be credible.   See footnote 4 below..  FN3. The court finds the letters from the defendant's employer stating that the defendant was not paid a bonus in 2010, 2011 or 2012 to be credible.   See footnote 4 below.

FN4. The colloquy concerning a question on direct examination from the plaintiff's counsel to plaintiff, on page 14, line 23 of the transcript from the April 9, 2013 hearing, actually reads “from 2010 to 2014 inclusive.”.  FN4. The colloquy concerning a question on direct examination from the plaintiff's counsel to plaintiff, on page 14, line 23 of the transcript from the April 9, 2013 hearing, actually reads “from 2010 to 2014 inclusive.”

FN5. In her motion, the plaintiff alleges the three letters, identified as plaintiff's exhibit 16, are “non verifiable.”   But the court's examination of exhibit 16 reveals three letters on what appears to be Barclays Capital letterhead that lists Barclays' United States' mailing address and telephone number, with each letter signed by a representative of Barclays representing that the defendant was not paid a bonus for performance year 2009, 2010 and, explicitly providing that the defendant did not receive a cash bonus for calendar year 2011..  FN5. In her motion, the plaintiff alleges the three letters, identified as plaintiff's exhibit 16, are “non verifiable.”   But the court's examination of exhibit 16 reveals three letters on what appears to be Barclays Capital letterhead that lists Barclays' United States' mailing address and telephone number, with each letter signed by a representative of Barclays representing that the defendant was not paid a bonus for performance year 2009, 2010 and, explicitly providing that the defendant did not receive a cash bonus for calendar year 2011.

FN6. Defendant's exhibit H depicting the defendant's earning for the period February 23, 2012 and showing deductions of $25,000, $2,683.69, $1,440 and $9,620 for federal, social security, medicare and New York State taxes, respectively..  FN6. Defendant's exhibit H depicting the defendant's earning for the period February 23, 2012 and showing deductions of $25,000, $2,683.69, $1,440 and $9,620 for federal, social security, medicare and New York State taxes, respectively.

FN7. The evidence for these motions as well as all other motions ruled on herein were presented simultaneously..  FN7. The evidence for these motions as well as all other motions ruled on herein were presented simultaneously.

FN8. This stock is referred to as “ESAS” in the separation agreement..  FN8. This stock is referred to as “ESAS” in the separation agreement.

FN9. This is just one example:Q: “Now, you've heard Mr. Dougherty's explanation of the New York State tax adjustment of 58 thousand.   Can you explain the differences between his position and yours?”A: “Yes, I'm looking at that now.   I went back and I took a look at the New York State tax rates.   I would say that Mr. Dougherty's position that the tax rate in New York State maybe correct and mine maybe wrong.   But I've got to go back and tax a look at that, because I did pull up the, a New York State Tax Rate Schedule from 2010.   But I don't believe what I see here, because it shows rates of on certain incomes much higher than what I understand to be the tax rate.   So I would say that I would need to verify or we should correctly determine what that tax is, because although this is what my report says, I'm not hundred percent confident that, that number is correct.”Q: “You would base that on a document your receive from New York State off the internet?”A: “No, I didn't.   I based it on the computation of the 2010 New York State return through our program.”Q: “Okay.”A: “But I believe that it most likely that there is a mistake.”Q: “Okay.”Q: “Are you prepared to adopt Mr. Dougherty's analysis that the fifty-eight thousand maybe a more accurate number?”A: “I would say it's probably much more accurate number.”.  FN9. This is just one example:Q: “Now, you've heard Mr. Dougherty's explanation of the New York State tax adjustment of 58 thousand.   Can you explain the differences between his position and yours?”A: “Yes, I'm looking at that now.   I went back and I took a look at the New York State tax rates.   I would say that Mr. Dougherty's position that the tax rate in New York State maybe correct and mine maybe wrong.   But I've got to go back and tax a look at that, because I did pull up the, a New York State Tax Rate Schedule from 2010.   But I don't believe what I see here, because it shows rates of on certain incomes much higher than what I understand to be the tax rate.   So I would say that I would need to verify or we should correctly determine what that tax is, because although this is what my report says, I'm not hundred percent confident that, that number is correct.”Q: “You would base that on a document your receive from New York State off the internet?”A: “No, I didn't.   I based it on the computation of the 2010 New York State return through our program.”Q: “Okay.”A: “But I believe that it most likely that there is a mistake.”Q: “Okay.”Q: “Are you prepared to adopt Mr. Dougherty's analysis that the fifty-eight thousand maybe a more accurate number?”A: “I would say it's probably much more accurate number.”

Richards, Sybil V., J.