O'Brien v. O'Brien
O'Brien v. O'Brien
Opinion
In this certified appeal arising from a marital dissolution action, we must determine whether a trial court properly may consider a party's violation of a court order when distributing marital property, even if the trial court finds that the violation is not contemptuous. The plaintiff, Michael J. O'Brien, filed this action to dissolve his marriage to the defendant, Kathleen E. O'Brien. During the pendency of the action, the plaintiff sold shares of stock and exercised certain stock options without first receiving permission from either the defendant or the trial court, as required by Practice Book § 25-5,
1
which also provides that a party
**85
who fails to obey the orders automatically entered thereunder may be held in contempt of court. The trial court found that the plaintiff's transactions violated those orders but did not hold the plaintiff in contempt because the court concluded the violations were not wilful. Nevertheless, because the transactions had caused a significant loss to the marital estate, the court considered that loss when it distributed the marital property between the parties, awarding a greater than even distribution to the defendant. On appeal, the Appellate Court concluded that, in the absence of a finding of contempt, the trial court lacked the authority to afford the defendant a remedy for the plaintiff's violation of the automatic orders. See
O'Brien
v.
O'Brien
,
The Appellate Court's opinion and the record contain the following undisputed facts and procedural history relevant to this appeal. The parties were married in 1985 and had three children together, all of whom were under the age of eighteen when the trial court rendered the dissolution judgment. See
O'Brien
v.
O'Brien
, supra,
At the time of the dissolution action, the parties' assets consisted principally of numerous bank and investment accounts, their principal residence in the town of Greenwich, a second home, and personal property.
**87 The plaintiff also held vested shares of Omnicom stock and unvested Omnicom stock options.
The plaintiff filed the present action in 2008, alleging that the marriage had irretrievably broken down. See id., at 579,
Attached to the plaintiff's complaint was a copy of the automatic orders required by Practice Book § 25-5 (d). In accordance with the requirement of § 25-5 (b) (1), that attachment included the admonition that the parties were not permitted to "sell, transfer, exchange, assign, remove, or in any way dispose of ... any property" while the dissolution action was pending without the prior consent of the other party or the court.
The trial court rendered judgment dissolving the parties' marriage in September, 2009. The court also entered custody orders regarding the minor children and financial orders distributing the marital property between the parties. In its financial orders, the trial court effectively awarded 55 percent of the marital assets to the defendant and 45 percent to the plaintiff.
O'Brien
v.
O'Brien
, supra,
The plaintiff appealed from the trial court's financial orders, challenging, inter alia, its unallocated alimony and child support award.
While the dissolution action or the appeal from the judgment of dissolution was pending-and while the automatic orders thus remained in effect-the plaintiff executed three stock transactions that are the subject of the present appeal. See
O'Brien
v.
O'Brien , supra,
The plaintiff executed the second and third transactions in 2010 and 2012, respectively, after the original trial and while the first appeal was pending. See id., at 581,
On remand, the defendant filed a motion for contempt with respect to the plaintiff's transactions. Id., at 582,
At the remand trial in February, 2014, the defendant presented expert testimony to establish the economic loss resulting from the plaintiff's transactions. See
For his part, the plaintiff admitted that he had not sought permission to engage in the transactions. He
**90
nevertheless testified that he had consulted with attorneys concerning the transactions before executing them and that he did not believe that he otherwise needed permission to execute the transactions. The plaintiff further testified that he thought converting the shares to cash would best preserve their value in the face of ongoing market volatility. Id., at 579,
After trial following the remand, the trial court issued a memorandum of decision and new financial orders. The court first explained that, in crafting its financial orders, it had considered the testimony and exhibits presented, along with the required statutory criteria, set forth in General Statutes § 46b-81,
2
governing the trial court's distribution of marital property. The court then turned to its findings of fact. After setting forth the history of the parties' marriage and careers, the court determined that the plaintiff's earning capacity exceeded the defendant's, finding that the plaintiff had earned at least $1.2 million annually in the years leading up to the dissolution, compared to $143,000 that the defendant earned annually. With respect to the marital assets, the court explained that it had valued them as of the original date of dissolution. Id., at 583,
**91
With respect to the transactions, the trial court found that the plaintiff had sold 28,127 shares of Omnicom stock and exercised 75,000 Omnicom stock options while the automatic orders were in effect and without the defendant's consent or the court's permission. Id., at 579, 581,
The trial court then turned to property distribution. The assets in the marital estate had a value of approximately $6.5 million. 3 The trial court awarded the defendant *1247 the principal residence and permitted her to keep a pension from Credit Suisse, as well as portions of the parties' bank and retirement accounts, among other assets. The total value of the award to the defendant was approximately $4.4 million. The trial court awarded the plaintiff portions of the parties' bank and retirement accounts, among other assets. The total value of the award to the plaintiff was approximately $2.1 million. According to the plaintiff's accounting, the award amounted to a 68 percent distribution of the marital estate to the defendant and a 32 percent distribution to the plaintiff. The trial court also ordered the plaintiff to pay the defendant child support and alimony for a **92 period of twenty-one years, with a reduction in the amount of alimony every seven years. 4
After the trial court issued its new financial orders, the plaintiff filed a motion for articulation, asking the court to explain the effect of the plaintiff's transactions on the court's property distribution and how the trial court had valued the loss that the transactions caused to the marital estate. In an articulation, the trial court explained that "financial orders in dissolution proceedings often have been described as a mosaic, in which all of the various financial components are carefully interwoven with one another. ... Therefore, it is impossible to say, with great specificity, exactly how the court 'took into account' the [sale] of the shares and the exercise of the stock options by the plaintiff. However, these transactions by the plaintiff were taken into account when the defendant was awarded the family home and her pension from Credit Suisse, as well as the equitable division of all of the other assets of the parties." (Citation omitted.) As for the loss to the estate, the trial court explained that it had credited the testimony of the defendant's expert. The court thus determined that, if the plaintiff had not sold the shares and exercised the stock options when he did but, instead, had retained them as contemplated by the automatic orders, they would have been worth about $3.5 million more at the time of the trial following remand when compared to their value at the time that the plaintiff actually sold or exercised them.
The plaintiff appealed to the Appellate Court, which reversed the trial court's financial orders. See
**93
O'Brien
v.
O'Brien , supra,
The Appellate Court agreed with the plaintiff, concluding that the plaintiff's violations of the automatic orders could be considered by the court only if they rose to the level of contempt or a dissipation of marital assets. Id., at 589,
Concerning the trial court's contempt powers, the Appellate Court further explained that "[j]udicial sanctions in civil contempt proceedings may, in a proper case, be employed for either or both of two purposes: to
**94
coerce the defendant into compliance with the court's order, and to compensate the complainant for losses sustained. ... [If] compensation is intended, a fine is imposed, payable to the complainant." (Internal quotation marks omitted.) Id., at 590,
With respect to the trial court's authority to consider dissipation under § 46b-81, the Appellate Court noted that the trial court had not made a finding of dissipation, and that such a finding would be unwarranted in the present case because, as this court explained in
Gershman
v.
Gershman
,
Because the trial court had not found contempt or dissipation, the Appellate Court concluded that the trial court did not have the authority to compensate the defendant for the plaintiff's transactions, even though those transactions had violated the automatic orders. Id., at 593,
*1249
We then granted the defendant's petition for certification to decide whether the Appellate Court correctly concluded that the trial court should not have considered the plaintiff's violations of the automatic orders in its division of the marital assets because the court had not held the plaintiff in contempt for those violations.
O'Brien
v.
O'Brien , supra,
I
We begin with the certified question. The defendant claims that the Appellate Court incorrectly concluded that the trial court lacked the authority to afford her a remedy for the plaintiff's violations of the automatic orders in the absence of a contempt finding. In support of this claim, the defendant contends that the trial court has the power to consider the plaintiff's actions under § 46b-81, which governs a trial court's distribution of marital assets in a dissolution proceeding and empowers the trial court to divide marital assets between the parties upon consideration of "the contribution of each of the parties in the acquisition, preservation or appreciation in value of" the marital assets. (Emphasis added.) General Statutes § 46b-81 (c). The defendant **96 further contends that the plaintiff's unilateral decision to swap a substantial equity stake-along with its potential for increase in value and dividends-for an asset like cash is the antithesis of preservation and appreciation, and thus may be considered by a court when it divides property under the statute.
We agree with the defendant that the trial court had the authority to consider the plaintiff's transactions when distributing the marital property, but for reasons different from those advanced by the defendant. Applying plenary review to this question of law; see, e.g.,
Maturo
v.
Maturo
,
A
It has long been settled that a trial court has the authority to enforce its own orders. This authority arises from the common law and is inherent in the court's function as a tribunal with the power to decide disputes.
Papa
v.
New Haven Federation of Teachers
,
The court has an array of tools available to it to enforce its orders, the most prominent being its contempt power.
6
Our law recognizes two broad types of contempt: criminal and civil. See, e.g.,
DeMartino
v.
Monroe Little League, Inc.
,
To impose contempt penalties, whether criminal or civil, the trial court must make a contempt finding, and this requires the court to find that the offending party wilfully violated the court's order; failure to comply with an order, alone, will not support a finding of contempt. See, e.g.,
Marshall
v.
Marshall
,
But a trial court in a contempt proceeding may do more than impose penalties on the offending party; it also may remedy any harm to others caused by a party's violation of a court order. When a party violates a court order, causing harm to another party, the court may "compensate the complainant for losses sustained" as a result of the violation. (Internal quotation marks omitted.)
DeMartino
v.
Monroe Little League, Inc
., supra,
Unlike contempt penalties, a remedial award does not require a finding of contempt. Rather, "[i]n a contempt proceeding, even 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.)
Clement
v.
Clement
,
Following this principle, the Appellate Court has upheld compensatory awards imposed in contempt proceedings
**100
even when the trial court did not make a contempt finding. For example, in
Clement
v.
Clement , supra,
We cited this principle with approval in
AvalonBay Communities, Inc
. v.
Plan & Zoning Commission
,
We therefore conclude that, although the trial court could not punish the plaintiff because it had not found him in contempt, the court nevertheless properly determined that it could compensate the defendant for any losses caused by the plaintiff's violations of the automatic orders. The plaintiff's transactions-in which he sold and exchanged stock shares and options for cash-plainly violated the automatic orders, which expressly provide that, while the dissolution proceedings are pending, no party shall "sell, transfer, [or] exchange" any property without permission from the other party or the court. Practice Book § 25-5 (b) (1). The automatic orders are intended to "keep the financial situation of the parties at a status quo during the pendency of the dissolution action."
**102
Ferri
v.
Powell-Ferri
,
Even if the plaintiff did not intend to violate the court's order, if his unilateral decision to sell the shares and exercise the options caused a loss to the marital estate-and in turn to the defendant-then the trial court was justified in determining that the plaintiff should bear the losses. To be sure, the plaintiff may not have appreciated the extent of the harm his transactions might cause in the future. And, ordinarily, a party in a dissolution proceeding is not responsible for poor or shortsighted business decisions concerning marital assets. See
Gershman
v.
Gershman , supra,
We also conclude that the trial court acted properly in remedying the defendant's loss of her share of the marital estate by adjusting in her favor the distribution of the marital assets. Even though the trial court's property distribution is governed by § 46b-81, and providing a remedy for a violation of a court order is not one of the enumerated statutory factors, the trial court nevertheless had the discretion to remedy the plaintiff's violations of a court order through its distribution of the parties' marital property. See
Robinson
v.
Robinson
,
B
The plaintiff claims that the trial court's award is nevertheless erroneous because it was based on an improper method for valuing the loss to the marital estate, rendering it excessive. We disagree.
If a trial court elects to make whole a party injured by another party's violation of a court order, any award it makes must be reasonable in light of the harm to the injured party. A trial court has the equitable discretion to choose
*1254
whether to provide a remedy in the first place and to determine the amount of any remedial award in light of the specific circumstances of the case. See
Clement
v.
Clement , supra,
Moreover, the trial court's conclusions concerning the appropriate remedial award must be based on evidence presented to the court.
Nelson
v.
Nelson , supra,
In the present case, the trial court determined the amount of the loss after a trial at which the parties were each afforded the opportunity to present evidence concerning the extent of the loss, and the defendant adduced testimony from an expert witness. The plaintiff's counsel cross-examined the defendant's expert and also had the opportunity to call witnesses on behalf of the plaintiff but did not do so. The trial court further entertained argument on the issue.
After considering the parties' positions, the trial court credited the testimony of the defendant's expert and found that the transactions caused a net loss to the marital estate of $3.5 million. The court arrived at that **106 amount by looking to the difference between (1) the value of the stock shares and options at the time the plaintiff either sold or exercised them, and (2) the value the shares and options would have had at the time of the trial following remand, when the shares or options would have been distributed, if the plaintiff had not sold or exercised them in violation of the automatic orders. The trial court determined that the shares and options had a total value of $2,562,190 when the plaintiff sold or exercised them and that, if the plaintiff had not done so, they would have had a value of $6,093,019 at the time of the trial. Taking the difference between these two values, the trial court found that the plaintiff's transactions had caused a net loss of approximately $3.5 million in value to the marital estate. *1255 The defendant, however, was not necessarily entitled to be compensated for the full $3.5 million loss to the marital estate. Because that value reflected the loss amount to the entire marital estate, and not just the defendant's share, she presumably should have received no more than the losses fairly attributable to her share of the marital estate. Thus, the defendant's counsel acknowledged during closing argument that if, for example, the court awarded the defendant 55 percent of the marital assets, including the stock shares and options, she would be entitled to compensation for no more than 55 percent of the total losses to the marital estate. 7 The defendant's counsel also acknowledged that the amount of any remedial award should be adjusted for the taxes that would have been paid on **107 any subsequent sale of the stock and exercise of the options, which was not reflected in the expert's valuation of the stock shares. In light of these factors, and the plaintiff's own valuations of the marital assets distributed, it is apparent that the trial court fairly determined the loss to the estate to be $3.5 million and that its adjustment of the distribution in favor of the defendant did not exceed the defendant's reasonable share of the loss resulting from the unauthorized transactions. 8
Nevertheless, the plaintiff claims that the trial court improperly determined that the loss to the marital estate
**108
was $3.5
*1256
million. He claims that the trial court was required to calculate the loss to the marital estate by considering the value that the stock shares and options would have had on the date of the dissolution decree, September, 2009, rather than at the time of the remand trial in February, 2014. For support, he relies on
Sunbury
v.
Sunbury
,
Seizing on our conclusion in Sunbury , the plaintiff asks us to extend its reasoning to instances in which, as in the present case, the trial court is not valuing marital property for the purpose of distributing it under § 46b-81 but, rather, determining the proper remedy for a violation of a court order. Because the trial court effected the remedial award by adjusting its property distribution, the plaintiff argues that Sunbury applied to the trial court's remedial award and barred the court from considering the value that the stock shares and options would have had as of the time of the trial following remand, if the plaintiff had not sold or exercised them. Instead, he argues, the court should have looked **109 to their value as of the dissolution date and determined the harm to the marital estate using that value. He also maintains that, because the trial court did not make any findings about the value of the stock shares and options as of the date of dissolution, a new hearing on all financial issues is required.
We disagree that Sunbury applies to the trial court's decision to remedy the plaintiff's violations of its orders. As the plaintiff tacitly admits in his brief to this court, Sunbury applies to the distribution of marital property between spouses pursuant to § 46b-81 but does not purport to place limits on the trial court's inherent authority to make a party whole when another party has violated a court order. Sunbury therefore did not limit the discretion of the trial court in the present case to consider the present value of the stocks and options when fashioning an appropriate remedy. 9 In considering how to make the defendant whole for the violation pursuant to its inherent authority, the trial court was justified in looking beyond the value of the stocks and options on the date of dissolution and, instead, to the value the defendant might actually have received from any stocks and options the court could have distributed to the defendant at *1257 the time of trial on remand. The trial court's decision in the present case to effect its remedial award by adjusting the distribution, rather than by ordering the plaintiff to make a separate payment, does not alter the fact that its remedial award **110 was made pursuant to its inherent authority, not § 46b-81. Thus, our holding in Sunbury does not apply to the trial court's remedial award.
The plaintiff further contends that, if Sunbury does not apply, the trial court should have valued the loss to the defendant by using the value the stocks and options would have had on the date of the violations, not the date of the trial following remand. Borrowing from principles of contract law, the plaintiff asserts that the defendant's damages should be calculated by looking only to the losses the defendant incurred as of the date of the breach, without regard to any later change in the value of the stocks and options. Thus, the plaintiff agrees that if, for example, he had sold the stock for less than fair market value at the time he sold it, he might be responsible to the defendant for the loss, but, because he exchanged the stock for its fair market value in cash, he argues that there was no cognizable loss to the estate on the date of the breach and, as a result, no basis for a remedial award to the defendant. The plaintiff contends that determining loss by looking to the stock value at the time of the trial on remand entails the use of an arbitrary date in time to fix the value because that value fluctuates daily.
We disagree that assessing the value of the stocks and options at the time of the remand trial was arbitrary or irrational. At the time of that trial, the court could determine with certainty the precise value of the loss to the marital estate caused by the plaintiff's transactions. The defendant rightfully expected that the plaintiff would obey the automatic orders and that the stocks and options would remain in the marital estate until distributed to the parties by the court following a trial on remand. If the plaintiff had not sold the stock or exercised the options, and the trial court divided the marital assets between the parties, including the stocks and options, the defendant would have enjoyed the **111 benefit of any increase in their value. The plaintiff, however, unilaterally removed the stocks and options from the marital estate, preventing the court from distributing them in the form of stocks and options, and thus depriving the defendant of the opportunity to benefit from the increase in their value. Lacking the stocks and options to distribute, the court essentially awarded the defendant the value that her putative share of the stocks and options would have had at the time of the remand trial, putting the plaintiff in precisely the position she would have occupied at that time if the plaintiff had not violated the automatic orders. At that point, through its remedial award, the trial court made the value of the defendant's share of the marital estate whole against the losses caused by the plaintiff's violations. Certainly, the value of the stocks and options would fluctuate over time, meaning that the value required to make the defendant whole on a particular day would also fluctuate. But the trial court was entitled to put the defendant in the position she would have occupied in the absence of the plaintiff's violations of the automatic orders. As we previously observed, if the plaintiff did not wish to risk being held solely responsible for changes in the value of the stocks and options, he should not have sold the stock and exercised the options without proper authorization. In these circumstances, the trial court properly used the date of the remand trial to value the loss *1258 to the marital estate caused by the plaintiff's transactions. 10 **112 For these reasons, we conclude that the Appellate Court incorrectly determined that the trial court had lacked the authority to make the defendant whole for the plaintiff's violations of the automatic orders. We further conclude that the trial court's exercise of that authority was proper.
II
In light of our conclusions in part I of this opinion, we next consider whether the Appellate Court's judgment may nevertheless be affirmed on one of three alternative grounds raised by the plaintiff. The first two concern the plaintiff's violations of the automatic orders and the third involves the trial court's award of retroactive alimony.
A
The plaintiff first claims that his stock and option transactions did not violate the automatic orders established under Practice Book § 25-5 because they fall within the exception for transactions made "in the usual course of business ...." Practice Book § 25-5 (b) (1). The plaintiff argues that the trial court must have ignored the exception because it did not explicitly address the exception in its memorandum of decision. The plaintiff asserts that, in light of the trial court's failure to address this exception explicitly, the court's decision must be read as concluding that stock transactions can never fall within a person's usual course of business, a determination contrary to the plain language of § 25-5 (b) (1). We disagree that the trial court ignored this exception and conclude instead that the trial court implicitly determined that the exception does not apply.
The following additional facts and procedural history are relevant to our resolution of this issue. At trial, the **113 defendant called an expert to quantify the economic loss to the marital estate incurred by the plaintiff's transactions, and the plaintiff's counsel objected to the testimony as irrelevant. While arguing the objection, the plaintiff's counsel suggested that the transactions did not violate the automatic orders, claiming they fell within the usual course of business exception inasmuch as the plaintiff believed he was making a "prudent business" decision at the time. The trial court rejected this argument, responding that the plaintiff was "not in the business. If he were a used car dealer and sold a car in his lot, or if he were a boat salesman and sold a boat, he can do that. That's the ordinary course of business." After brief additional argument, the trial court overruled the objection and permitted the defendant's expert to testify.
In its memorandum of decision, the trial court found that the plaintiff had violated the automatic orders, explaining its finding as follows: "During the pendency of the action, and while the automatic orders were in effect, the plaintiff sold 28,127 shares of Omnicom ... stock and exercised *1259 75,000 Omnicom ... stock options without court order or consent from the defendant. ... The result of the sales was a significant loss to the marital estate. The court finds that these transactions did in fact violate the automatic orders."
Although the trial court did not explicitly state that it had found that the usual course of business exception was inapplicable in the present case, the lack of an express finding on this point is of no moment. When construing a trial court's memorandum of decision, "[e]ffect must be given to that which is clearly implied as well as to that which is expressed." (Internal quotation marks omitted.)
Wheelabrator Bridgeport, L.P.
v.
Bridgeport
,
In the present case, the trial court expressly found that the plaintiff had violated the automatic orders, which necessarily implies that the court also made a subsidiary finding that the plaintiff's conduct did not fall within any exception. Moreover, even if there were any doubt, arising from the trial court's memorandum of decision, as to whether the court considered the exception, it would be dispelled by the court's consideration and rejection of the exception in overruling the plaintiff's objection to the defendant's proffered expert testimony. We therefore disagree that the trial court ignored the exception or failed to determine whether it applied. 11
The plaintiff nevertheless contends that, even if the trial court rejected his claim that the exception applied, this court should adopt one of two rules concerning stock transactions during a dissolution proceeding. He first argues for a bright line rule that stock sales are always made in the usual course of business and thus **115 not subject to the automatic orders. As an alternative to this categorical rule, he urges us to adopt a rule presuming that stock sales fall within the usual course of business exception.
We decline to adopt either of these proposed rules because they are not supported by the text of the automatic orders set forth in Practice Book § 25-5. Those orders govern the transaction of "any property" and make no exception for transactions concerning certain types of assets, including stocks. Practice Book § 25-5 (b) (1). Instead, whether a particular transaction has been conducted in the usual course of business presents a question of fact, to be determined by looking to the circumstances of each case. See
*1260
Quasius
v.
Quasius
,
B
The plaintiff next claims the trial court incorrectly concluded that the stock options that he had exercised were marital property, subject to distribution between the parties. We again disagree. 13
Certain additional facts are necessary to our determination of this claim. The plaintiff received the options at issue in March, 2009, after filing the dissolution action but approximately six months before the trial court
**117
rendered judgment dissolving the parties' marriage in September, 2009. See
O'Brien
v.
O'Brien , supra,
At the trial on remand, the plaintiff testified about the purpose of the options. He initially testified that the options "are not compensatory" and "are not earned," but are issued solely as retention incentives to employees "so that they stay at the company until ... [the options] vest." Shortly thereafter, however, he clarified that the options had been awarded as compensation for his performance in the prior year, 2008, but that the options had a retentive component because they vested over time to create an incentive for him to stay with the company.
In its memorandum of decision, the trial court found that the options were marital property, explaining that, although "the options had not yet vested at the time of the original trial, they were awarded prior to the dissolution," and that the exercise of the options caused "a significant loss to the marital estate." The plaintiff challenges the court's determination that the options were marital property because, although they were awarded while the parties were still married, they did not vest until 2010 and thereafter, following the dissolution of the marriage in 2009. He further argues that they were not granted as compensation for any services performed during the marriage but were solely an incentive to remain employed until the time the options had vested. For these reasons, he contends that the unvested options were not marital property subject to distribution between the parties, and, consequently, the **118 defendant could not have suffered any cognizable loss by virtue of his decision to exercise them. 14
Unvested stock options may be considered marital property if they are earned during the marriage. See
Bornemann
v.
Bornemann , supra,
In the present case, the record supports the trial court's finding that the plaintiff's options were marital property. The plaintiff's testimony about the purpose of the options award was conflicting: although he initially testified that they were exclusively a retention incentive for future services to be performed after the marriage was dissolved, he later testified that they were compensation for past services but that they had a delayed vesting schedule to encourage him to stay employed with Omnicom. The court apparently credited his testimony that the options represented payment for past services and did not credit his earlier assertion to the
**119
contrary. The trial court had the opportunity
*1262
to observe the testimony firsthand and to evaluate the witness' attitude, candor, and demeanor while he was testifying. As the finder of fact, the trial court was free to credit all or any portion of the plaintiff's testimony.
15
See, e.g.,
State
v.
Andrews
,
C
Finally, the plaintiff takes issue with the trial court's award of retroactive alimony. After the remand trial in February, 2014, the trial court ordered the plaintiff to pay alimony to the defendant, and made its order retroactive to the date when the court originally entered the dissolution decree after the original trial in 2009. The total retroactive alimony due under the order was $646,472, with payment to be made to the defendant no more than forty-five days from the issuance of the order.
The plaintiff does not dispute the trial court's power to award retroactive alimony generally but claims that the award in this case was improper. He argues that the short payment period will require him to pay the arrearage out of his share of the marital assets distributed by the trial court, effectively making it a reduction in his property distribution. Because he must pay the **120 retroactive alimony from his own property distribution, he asserts, the award constitutes improper "double dipping." (Internal quotation marks omitted.) We are not persuaded.
The retroactive alimony award was not improper because trial courts are free to consider the marital assets distributed to the party
paying
alimony as a potential source of alimony payments. See, e.g.,
Krafick
v.
Krafick
,
Nevertheless, the plaintiff asserts his double dipping claim as a basis for challenging the overall fairness of the trial court's property distribution award. He claims that, when the retroactive alimony payment is factored in, the trial court effectively awarded 78 percent of the marital estate to the defendant and awarded him only 22 percent. He asserts that "such a distribution is grossly inequitable and cannot be sustained." Once again, we disagree.
"[T]rial courts are endowed with broad discretion to distribute property in connection with a dissolution of marriage";
Greco
v.
Greco , supra,
**122
"[J]udicial review of a trial court's exercise of its broad discretion in domestic relations cases is limited to the questions of whether the [trial] court correctly applied the law and could reasonably have concluded as it did. ... In making those determinations, we allow every reasonable presumption ... in favor of the correctness of [the trial court's] action." (Citation omitted; internal quotation marks omitted.)
Bornemann
v.
Bornemann , supra,
Even if we accept the plaintiff's valuation of the trial court's property distribution for purposes of this appeal, we reject his contention that the trial court abused its discretion for at least three reasons. First, a distribution ratio of 78 percent to 22 percent is not, on its face, excessive, as the plaintiff contends. Indeed, we have upheld distributions awarding as much as 90 percent of the marital estate to one party.
Sweet
v.
Sweet
,
*1264
Greco
v.
Greco , supra,
The judgment of the Appellate Court is reversed and the case is remanded to that court with direction to affirm the judgment of the trial court.
In this opinion the other justices concurred.
Practice Book § 25-5 provides in relevant part: "The following automatic orders shall apply to both parties, with service of the automatic orders to be made with service of process of a complaint for dissolution of marriage .... The automatic orders shall be effective with regard to the plaintiff ... upon the signing of the complaint ... and with regard to the defendant ... upon service and shall remain in place during the pendency of the action, unless terminated, modified, or amended by further order of a judicial authority upon motion of either of the parties:
* * *
"(b) In all cases involving a marriage ... whether or not there are children:
"(1) Neither party shall sell, transfer, exchange, assign, remove, or in any way dispose of, without the consent of the other party in writing, or an order of a judicial authority, any property, except in the usual course of business or for customary and usual household expenses or for reasonable attorney's fees in connection with this action.
* * *
"(d) The automatic orders of a judicial authority as enumerated above shall be set forth immediately following the party's requested relief in any complaint for dissolution of marriage ... and shall set forth the following language in bold letters:
" Failure to obey these orders may be punishable by contempt of court. If you object to or seek modification of these orders during the pendency of the action, you have the right to a hearing before a judge within a reasonable period of time .
"The clerk shall not accept for filing any complaint for dissolution of marriage ... that does not comply with this subsection." (Emphasis in original.)
General Statutes § 46b-81 provides in relevant part: "(a) At the time of entering a decree annulling or dissolving a marriage ... the Superior Court may assign to either spouse all or any part of the estate of the other spouse. ...
* * *
"(c) In fixing the nature and value of the property, if any, to be assigned, the court, after considering all the evidence presented by each party, shall consider the length of the marriage, the causes for the annulment, dissolution of the marriage or legal separation, the age, health, station, occupation, amount and sources of income, earning capacity, vocational skills, education, employability, estate, liabilities and needs of each of the parties and the opportunity of each for future acquisition of capital assets and income. The court shall also consider the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estates."
The parties disagree about the precise value of the property distribution, and the trial court made no specific findings with respect to that value. For purposes of this appeal, however, we rely on the plaintiff's valuation of the marital estate and property distribution.
Specifically, the trial court ordered the plaintiff to pay alimony in the amount of $45,000 per month for the first seven years commencing from the date of dissolution, $37,500 per month for the next seven years, and then $25,000 per month for the next seven years. The alimony payments terminated after the third seven year period, unless one of the parties died or the defendant remarried beforehand.
In her brief to this court, the defendant did not specifically argue that the trial court possessed the inherent authority to address the plaintiff's violations but instead focused her arguments on the trial court's statutory authority under § 46b-81. We nevertheless resolve the present appeal in reliance on the trial court's inherent authority because (1) the defendant raised this ground in her brief to the Appellate Court, and (2) at oral argument before this court, the plaintiff's counsel acknowledged that the trial court had inherent authority to address the plaintiff's violations of the automatic orders and clarified that the plaintiff was disputing only how the trial court exercised that authority in the present case.
Other tools not addressed in the present case include the court's power to sanction parties and their attorneys for "dilatory, bad faith and harassing litigation conduct, even in the absence of a specific rule or order of the court that is claimed to have been violated." (Internal quotation marks omitted.)
Millbrook Owners Assn
.
, Inc
. v.
Hamilton Standard
,
Because the plaintiff's transactions removed the stock shares and options from the marital estate before the trial court could distribute them on remand, we do not know precisely what portion of the stock shares and options the trial court might have awarded to the defendant, if they were still available for distribution. In these circumstances, a court could reasonably conclude that a party should be compensated for a percentage of the losses commensurate with that party's share of the marital estate as awarded by the trial court.
The trial court in the present case took the plaintiff's transactions into account by adjusting the distribution of marital assets in the defendant's favor, but it did not articulate precisely what share of the marital estate it had awarded to the defendant. Nor did it articulate how much of its total property distribution was attributable to the plaintiff's violations of the automatic orders. The plaintiff has not claimed that the lack of articulation in this respect itself requires reversal. In the future, however, the trial court should articulate both the adverse impact that a party's violation had on the value of the marital estate and precisely how it compensated the injured party for that violation.
Nevertheless, in the present case, considering the plaintiff's valuation of the trial court's total property distribution and the plaintiff's suggested split of the marital assets, we conclude that the trial court's remedial award to the defendant did not exceed the defendant's reasonable share of the loss. According to the plaintiff's valuation of the marital assets, the total value of the assets divided, without regard to the stocks and options, was $6,514,836. The plaintiff had asked the trial court to divide the marital assets evenly between the parties. Even if the trial court followed the plaintiff's suggestion, the defendant would have been entitled to one half of this amount, that is, $3,257,418. In this scenario, the trial court also would have been justified in awarding the defendant 50 percent of the $3.5 million in losses caused by the plaintiff's violations of the automatic orders, an additional $1,750,000. The defendant was actually awarded a total of $4,428,784-meaning that she effectively received $3,257,418 of the marital assets and an additional $1,171,366 for the losses caused by the plaintiff. Accordingly, under the plaintiff's valuation, the defendant effectively received exactly one half of the losses caused by the plaintiff, less a discount of 33 percent for taxes. Consequently, even if we assume that the trial court gave the defendant exactly the share of the estate that the plaintiff argued that the defendant was entitled to, and even if we use the plaintiff's own valuation of the trial court's distribution, it is evident that the trial court's award did not exceed the reasonable value of the defendant's losses and thus did not amount to a penalty for the plaintiff's violations of the automatic orders.
To be sure, if the plaintiff had not sold the stocks or exercised the options, the stocks and options would have remained a part of the marital estate and have been subject to distribution under § 46b-81. In that circumstance, Sunbury would have required the trial court to look to the value of the stocks and options as of the dissolution date. Of course, if the plaintiff had not sold the stocks or exercised the options, the defendant would nevertheless have benefited from any increase in the actual value of any stocks or options she received in the distribution, even if the trial court could not have formally considered the increased value when distributing the assets.
We are thus unpersuaded by the plaintiff's contract law analogy. A plaintiff in a breach of contract action is ordinarily entitled to be placed in as good a position as he would have been in the absence of the breach, and an award of damages may include lost profits. E.g.,
West Haven Sound Development Corp
. v.
West Haven
,
The trial court was fully justified in finding that the exception did not apply in the present case. The plaintiff was an attorney by profession, not a stockbroker, and the plaintiff has not directed us to any evidence that he otherwise had a regular practice of buying and selling stocks, either as a hobby or in the management of his personal finances. Nor did he present evidence of a regular practice of transacting his Omnicom stock that he had received as compensation for his employment. In fact, the plaintiff testified that his sale of Omnicom stock in 2009-when the automatic orders were in effect-was the first time he had sold such stock.
We do not suggest, as the trial court did, that the usual course of business exception is reserved only for transactions made in connection with a party's business or profession; rather, because the automatic orders are intended to maintain the status quo between the parties, the exception would appear to extend to personal transactions, but only if any such transactions are conducted in the normal course of the parties' ordinary activities, such that both parties would fully expect the transactions to be undertaken without prior permission or approval. Even if the trial court took a more limited view of the exception, however, that view would not provide a basis for reversal of the trial court's financial orders. The testimony in the present case indicates that the plaintiff had not previously sold stocks earned as part of his compensation, and, thus, he cannot establish a preexisting practice of selling these assets, even under a more expansive interpretation of the exception. See footnote 11 of this opinion.
The Appellate Court did not address this argument, concluding that the plaintiff had waived it.
O'Brien
v.
O'Brien , supra,
We note that, in the present case, whether the options were marital property is irrelevant to our determination that the plaintiff's exercise of those options violated the automatic orders, which expressly bar the sale, transfer, or exchange of "any property," not just marital property, during the pendency of the dissolution proceedings. Practice Book § 25-5 (b) (1). We consider whether the options were marital property because that issue is relevant to determining the extent of any losses that the defendant may have sustained and that are attributable to those transactions and, thus, to the plaintiff.
The trial court's finding is also supported by the Omnicom plan governing the issuance of stock options, which was entered into evidence at trial. That plan makes no reference to options being awarded for future services or retention purposes, and does not make the exercise of any options contingent on meeting any future performance goals.
General Statutes § 46b-82 (a) provides in relevant part: "At the time of entering the decree, the Superior Court may order either of the parties to pay alimony to the other, in addition to or in lieu of an award pursuant to section 46b-81.... In determining whether alimony shall be awarded, and the duration and amount of the award, the court shall consider the evidence presented by each party and shall consider the length of the marriage, the causes for the annulment, dissolution of the marriage or legal separation, the age, health, station, occupation, amount and sources of income, earning capacity, vocational skills, education, employability, estate and needs of each of the parties and the award, if any, which the court may make pursuant to section 46b-81 , and, in the case of a parent to whom the custody of minor children has been awarded, the desirability and feasibility of such parent's securing employment." (Emphasis added.)
Reference
- Full Case Name
- Michael J. O'BRIEN v. Kathleen E. O'BRIEN
- Cited By
- 36 cases
- Status
- Published