Bruce W. Fulton v. Kathleen M. Fulton (2013)

MEMORANDUM OF DECISION

On April 4, 2007 the court dissolved the marriage of the parties on an uncontested basis.   The separation agreement of the parties was incorporated in the judgment.   The plaintiff now moves to modify the alimony and child support on the ground that there has been a substantial reduction in his income since the dissolution.   By order of the court dated May 13, 2013, in the event the court reduces the plaintiff's obligations, all orders will be retroactive to May 13, 2013.

These motions present an interesting issue:  is the court bound to use the financial affidavit filed by the plaintiff at the time of the dissolution as a starting point, or may the court look at the “real” income of the plaintiff at that time?   The plaintiff claims that the financial affidavit he filed on the day of the dissolution does not reflect his real income and that this is obvious because he agreed to pay alimony and child support orders totaling $1,025 per week while his financial affidavit reflects net income of only $850 per week.

The plaintiff's financial affidavit dated April 3, 2007 on the day of the dissolution reflects gross weekly income of $1,317.87 and net weekly income of $850.   There is a child support guidelines worksheet in the file which shows presumptive support from the plaintiff of $194.   The separation agreement provided that the plaintiff would pay the defendant alimony of $750 per week and child support of $275 for the support of one minor child.   His current financial affidavit reflects gross weekly income of $881 and net weekly income of $678.

The plaintiff owns and operates a construction business, Fulton Foundations, Inc., specializing in residential foundations.   The plaintiff is the sole stockholder and is a W–2 employee.   At the time of the dissolution the plaintiff had been having yearly income of at least $100,000 per year which he expected to continue.   Instead, the new home market has gone through a deep decline and he claims that his income has decreased accordingly.

The plaintiff's 2007 tax return reflects gross income of $105,195.   His 2010 tax return shows gross income of $64,121.   His 2011 tax return shows gross income of $67,940.   His 2012 tax return shows gross income of $37,371.   In 2009 the plaintiff took a second mortgage on his house of $50,000.   In 2012 he borrowed $30,000 from a friend and $34,000 from his wife.   These sums were deposited directly into the company account to pay expenses including his own wages.

The plaintiff explains the discrepancy between his 2007 gross income of $105,195 (average of $2,022.98 per week) and his financial affidavit weekly income of $1,317.87 (annualized at $68,529) by saying that he followed the instructions on the financial affidavit form and used the average of only his last thirteen weeks of income.   The financial affidavit, JD–FM–6–Rev. 1–03, provides:  “Use weekly average not less than 13 weeks.”

The transcript of the dissolution hearing on April 4, 2007 reveals that the court (Sheedy, J.) questioned the plaintiff as follow:

THE COURT:  Okay. What is the business of Fulton Foundations, Inc., sir?

THE WITNESS:  I do foundations.

THE COURT:  Just as it would suggest, okay.

With regard to the agreement you have made to pay the lady child support, and certain other agreements which you have also entered into, they can perhaps be described as generous.   You have every reason to expect, I guess, that the income you will receive from Fulton Foundations, Inc., will underwrite all of the obligations that you have undertaken under the terms of this agreement;  is that correct?

THE WITNESS:  Yes.

THE COURT:  And you've considered that and you've discussed it with Attorney Reis, and this is what you want to do?

THE WITNESS:  I—I considered it a great deal, yes.

THE COURT:  Okay. And you have a request that the Court make those provisions an order of the Court, sir, correct?

THE WITNESS:  Yes.

THE COURT:  Are there any questions of any kind that you want to ask me?

THE WITNESS:  No, I have none, your Honor.

THE COURT:  Okay. Thank you, sir, you may step down.   When issuing her orders Judge Sheedy stated:

The gentleman is ordered to pay $275 per week in child support for Tiffany.   That is an upward deviation.   Mr. Fulton has been asked questions about that.   I find that his earning power is at least at the present time superior to that of Mrs. Fulton, and the gentleman understands and readily accepts the increased obligation that he undertakes by that order.   I commend him for being willing to do the same.

“General Statutes Sec. 46b–86 governs the modification or termination of an alimony or support order after the date of a dissolution judgment.   When, as in this case, the disputed issue is alimony [or child support], 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.   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.   Once a trial court determines that there has been a substantial change in the financial circumstances of one of the parties, the same criteria that determine an initial award of alimony and support are relevant to the question of modification.   More specifically, these criteria, outlined in General Statutes § 46b–82, require the court to consider the needs and financial resources of each of the parties and their children, as well as such factors as the causes for the dissolution of the marriage and the age, health, station, occupation, employability and amount and sources of income of the parties.   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 includes only the power to adapt the order to some distinct and definite change in the circumstances or conditions of the parties.   Thus, [w]hen presented with a motion for modification, a court must first determine whether there has been a substantial change in the financial circumstances of one or both of the parties ․ Second, if the court finds a substantial change in circumstances, it may properly consider the motion and, on the basis of the § 46b–82 criteria, make an order for modification ․ The court has the authority to issue a modification only if it conforms the order to the distinct and definite changes in the circumstances of the parties.”  (Citations omitted;  internal quotation marks omitted.)  Olson v. Mohammadu, 310 Conn. 665, 671–74 (2013).

The defendant claims that the issue has been definitively decided by the Appellate Court in two decisions:  O'Bymachow v. O'Bymachow, 12 Conn.App. 113 (1987) and Sabrowski v. Sabrowski, 95 Conn.App. 625 (2006), rev'd, 282 Conn. 686 (2007).   In O'Bymachow, the trial court acted on a motion to modify an unallocated child support and alimony order.   At the time of the dissolution the plaintiff had listed ownership of two businesses on his financial affidavit but showed their values as “unknown.”   At the time of the modification hearing the plaintiff listed the business as having a value of $202,000.   The defendant argued that this was a substantial change of circumstances which entitled her to an increase in the unallocated child support and alimony order.   The plaintiff presented a witness who testified that the businesses had a value of $260,000 at the time of dissolution and that there had been no positive change in his circumstances because the value of the businesses had decreased $50,000.   The trial court agreed with the plaintiff and found no change of circumstances.   The Appellate Court reversed and found that the defendant and the court were entitled to rely on the evidence at the time of the trial that the plaintiff's businesses had unknown value which the court found to be equivalent to zero.   The court stated:  “In October 1982, the plaintiff in effect attributed no value to his businesses on his financial affidavit.   Presumably, that is one of the factors which induced the trial court, Ottaviano, J., to approve the agreement of the parties.   Furthermore, since the plaintiff was the owner of the business, he had the easier access to the information as to their values, and thus he had the greater obligation to present that information both to the court and to the defendant.   Under these circumstances it would be unfair and inequitable to permit him in October 1995, to take advantage of values which he did not disclose in October 1982.   To put it another way, in establishing a change of circumstances, the defendant was entitled to take as a starting point the values of the businesses as displayed to her and to the court at the time of the original judgment.   Viewed through this lens, the increase in values of the plaintiff's business from “unknown” or zero in October 1982, to $202,000 in October 1985, must be viewed as substantial and unforeseen.”  (Citations omitted.)  Id., 118–19.

The Sabrowski case presents facts which are even closer to the present case than those in O'Bymachow.   However, Sabrowski was reversed by the Supreme Court because the Appellate Court had based its reasoning on an argument not raised, argued or briefed by the parties.   For this reason, this court cannot rely on the Appellate Court decision as precedent.   But, it is worth reciting the facts of the case and reasoning of the court.   In Sabrowski the parties had stipulated to a dissolution in which the plaintiff would pay alimony of $550 per week.   The plaintiff's financial affidavit reflected total income of only $600 per week.   Five years later the plaintiff moved to modify his alimony on the ground that his income had dropped by $24,000 per year as a result of rent which his company was no longer able to pay to him.   The plaintiff acknowledged that he had been receiving the $24,000 per year rent at the time of the dissolution but had failed to show it on his financial affidavit.   The trial court reduced the plaintiff's alimony to $250 per week.  “In finding a substantial change of circumstances, the [trial] court evidently credited the testimony of the plaintiff at the modification hearing that his present income was $600 per week and that it was $24,000 per year less than that at the time of the divorce.”  Id., 628.

The Appellate court reversed the trial court and said:  “In the present case, the court, in acting on the plaintiff's motion to modify, found, as a matter of fact, that the plaintiff's income was approximately $600 per week, a figure identical to that at the time of the divorce as represented by the plaintiff in his financial affidavit.   In light of the factual determination, the plaintiff's contention that a substantial change in circumstances occurred cannot prevail.   As in O'Bymachow, it would be unfair and inequitable to permit the plaintiff here to take advantage of values that he did not disclose at the time of the divorce.”  Id., 631.   This result was reversed by the Supreme Court because the defendant had never raised the argument raised by the Appellate Court.

Based only on the O'Bymachow decision, I conclude that this court must look at the plaintiff's financial affidavit filed at the time of the dissolution as the starting point in determining whether there has been a substantial change of circumstances in the plaintiff's income.   To permit the plaintiff to argue that his income, in fact, was much higher than he showed on his own financial statement would be unfair and inequitable.   For this reason, the court must begin with the plaintiff's stated income at the time of the dissolution, i.e. net weekly income of $850.

The plaintiff's current stated weekly gross of $881 and net of $678 are not credible.   Having reviewed the plaintiff's tax returns and pay records for the past three years, the court finds that the plaintiff's income dropped during 2010–2012 but has begun to recover in 2013.   While his weekly gross and net may have dropped to the levels of $881 and $678 during 2010–2012, the plaintiff's average weekly gross pay was $1,252.10 for the first 27 weeks of 2013, nearly the same as he showed on his financial affidavit in 2007 at the time of the dissolution.   His pay stubs show that his net weekly pay for that period averaged $1,148.52, even higher than his 2007 affidavit.   Therefore, based on the most current evidence available to the court, the plaintiff is not suffering in 2013 from a substantial reduction in his income from that shown on his 2007 affidavit.

As Judge Sheedy stated at the time of the dissolution, the current orders “can perhaps be described as generous.”   But, the most current evidence is that the plaintiff's business is recovering from the sharp economic decline of the past several years and that the plaintiff's personal income is rebounding.   The plaintiff had the burden of showing that there was a substantial change of circumstances at the time the motion to modify was filed and at the time of the hearing on the motion.   The plaintiff's motion to modify was filed on March 28, 2013 and the hearing before this court was on August 21, 2013.¹  The plaintiff has been unable to meet that burden because he has not shown that in 2013 his net income has substantially decreased from that which he claimed in 2007 at the time of the dissolution.

The motion to modify is denied.

BY THE COURT,

John W. Pickard

FOOTNOTES

FN1. The defendant's post-hearing brief was filed on October 9, 2013 and the plaintiff's was filed on October 21, 2013..  FN1. The defendant's post-hearing brief was filed on October 9, 2013 and the plaintiff's was filed on October 21, 2013.

Pickard, John W., J.