In a ruling released on June 12, 2012, the Connecticut Appellate Court states in part:
ALVORD, J. The defendant, Herbert Jansen, appeals from the judgment of the trial court denying his motion to modify his alimony obligation to the plaintiff, Cheryl Jansen. On appeal, the defendant argues that the court abused its discretion in failing to find a substantial change in circumstances warranting modification of his alimony obligation pursuant to General Statutes § 46b- 86 (a). 1 Specifically, he contends that his forced retirement is a substantial change in circumstances because his annual taxable income decreased as a result. We find the defendant’s claim to be meritless and, accordingly, affirm the judgment of the trial court.
The following facts and procedural history are relevant to our disposition of the defendant’s appeal. On April 16, 2009, the defendant filed a motion to modify his alimony obligation to the plaintiff. 2 The defendant also sought a reduction in the amount of life insurance that he is required, pursuant to the parties’ separation agreement (agreement), to maintain for the benefit of the plaintiff. The court, Hon. Howard T. Owens, Jr., judge trial referee, heard the parties regarding the motion on November 30 and December 1 and 2, 2009, and heard testimony from the plaintiff’s expert witness, Philip J. DeCaprio, Jr., a forensic accountant who studied the parties’ financial records.
The parties were married on April 7, 1973. After twenty-three years of marriage, the parties entered into the agreement on October 18, 1996, which agreement was then incorporated into the judgment of dissolution rendered by the court on the same date. The parties have two children, one of whom was a minor at the time of the dissolution. The agreement provided for monthly unallocated child support and alimony in the amount of $16,500 to be paid by the defendant to the plaintiff until her death or remarriage. The agreement also provided the defendant with the option to petition the court for relief if the plaintiff cohabitated with a person of the opposite sex for more than four months or if the plaintiff earned more than $75,000 in gross income per year. The plaintiff could seek modification, pursuant to the agreement, if the defendant’s income increased by more than $150,000 per year. According to the agreement, the parties also had the rightto modify the alimony award pursuant to § 46b-86 (a). The agreement required the defendant to maintain his existing life insurance policy in the face amount of $750,000 with the plaintiff as the irrevocable beneficiary for as long as the defendant was required to pay alimony to the plaintiff.
At the time of the dissolution, the defendant worked for the accounting firm of Arthur Andersen and earned a gross annual income of $629,616 with a net monthly income of $27,509 and assets worth $567,721. The plain-tiff was a full-time graduate student with no monthly income and monthly household expenses exceeding $10,500. The defendant married his current wife, Anne Swope, four months after the judgment of dissolution was rendered. After the collapse of Arthur Andersen, the defendant was employed as a partner at Ernst & Young. The defendant testified that the reason that he transferred title to or made Swope a joint owner of a substantial amount of his assets was because he and Swope anticipated potential claims of liability based on his partnership at Arthur Andersen.
While working at Ernst & Young, the defendant earned substantially more in gross income than he had at the time of the dissolution. The defendant purchased a home in Norwalk, but conveyed it by quitclaim deed to Swope in 2002. The Norwalk property was sold for approximately $950,000 and a home in South Carolina was purchased for approximately $600,000 in 2009. A year prior, in 2008, a home in Bolton Landing, New York was purchased for approximately $800,000. All of the properties were acquired solely with the defendant’s funds and all of the expenses regarding the properties are paid by the defendant, yet the properties are titled only in Swope’s name. The defendant also claims $200,000 of equity in a New York City apartment he purchased for his daughter.
The defendant and Swope have several joint checking accounts and certificates of deposit funded solely by the defendant but in which the defendant claims Swope maintains an equal interest. Swope also maintains a separate investment account with Charles Schwab (Schwab account)in which she has approximately $3.35 million in assets funded mainly with her bonus earnings from her job as an investment banker. The defendant claims thatthe Schwab account belongs solely to Swope despite the fact that he contributed more than $200,000 to the account. 3 The defendant, however, deposited the entirety of his almost $2 million annual earnings into the couple’s joint accounts.
The defendant pays substantially all of the couple’s approximately $20,000 of monthly expenses. Swope pays for a de minimis amount of those expenses based on her approximately $430 per week of unemployment benefits, which she had been collecting from the government through the time of trial. The defendant also has gifted $20,000 annually to his adult children for the past five years. The defendant admits he bestowed these gifts without thought to his obligations to the plaintiff. The defendant also gifted $24,000 to his son’s fiance´e.
The defendant retired from Ernst & Young pursuant to the company’s mandatory retirement policy, which requires partners reaching the age of sixty to retire, although he received permission to work until he was sixty-one. The defendant argued that his retirement status has resulted in a $100,000 gap between his incomeand his alimony obligation. He claimed, therefore, that his alimony obligation pursuant to the agreement should be reduced from $198,000 yearly to $40,000 yearly in order for him to sustain his current lifestyle while continuing to pay the plaintiff one third of his annual income.
The plaintiff’s expert, DeCaprio, provided a detailed analysis of the parties’ financial information. DeCaprio testified that the defendant’s assets in October, 2009, were substantially higher than the assets he possessed on the date of the 1996 dissolution. DeCaprio testified that the combined assets of the defendant and Swope were in excess of $8 million and that 73.79 percent of those assets, some $6.3 million, were attributable to the defendant. He also testified that Swope was able to contribute to the Schwab account only because the defendant was contributing to her expenses. DeCaprio testified that the defendant paid all of his salary into jointly accessible funds while Swope maintained her assets separately. Finally, DeCaprio testified that the defendant and Swope had a ‘‘convoluted commingling offunds.’’ The defendant did not provide his own expert. Swope testified that she would agree that the couple’s assets were indeed commingled.
In the present case, the court made a threshold finding that no substantial change in the defendant’s financial circumstances existed. The defendant argues that the court should have found a substantial change in circumstances on the basis that he was forced to retire from his job at Ernst & Young, thereby decreasing his annual income. We are not persuaded. 4
While the court recognized that the defendant’s yearly income decreased due to his retirement, it found that there was no substantial change in circumstances because the defendant engaged in culpable conduct. 5 This court has stated that ‘‘if a party’s culpable conduct causes an inability to pay an alimony award, then the threshold question of whether a substantial change of circumstances exists is not met.’’ Id., 65 n.6; see also Sanchione v. Sanchione, 173 Conn. 397, 407, 378 A.2d 522 (1977) (new hearing ordered where trial court reduced alimony without finding whether inability to pay alimony was result of defendant’s own extravagance, neglect, misconduct or other unacceptable reason); Wanatowicz v. Wanatowicz, 12 Conn. App. 616, 620, 533 A.3d 239 (1987) (no substantial change in circumstances warranting alimony reduction because defendant’s reduction in funds brought about by his own fault after he ‘’ ‘blew’ ‘’ his money while drinking). 6 In the present case, the court found that the defendant commingled his assets with that of his new wife, Swope, and that the defendant gave large gifts to Swope and to his adult children without consideration and without regard for his lifetime alimony obligation to the plaintiff. The court found that the defendant failed to meet his burden of showing a substantial change in circumstances that was not tainted by his culpable actions.
For more information on the case quoted in part above see: http://www.jud.ct.gov/external/supapp/Cases/AROap/AP136/136AP392.pdf