Gaudio v. Gaudio

• Decision Date: 18 September 1990
• Docket Number: No. 7630,7630
• Citation: 23 Conn.App. 287,580 A.2d 1212
• Court: Connecticut Court of Appeals
• Parties: Maxine GAUDIO v. Arthur GAUDIO et al.

Page 1212

580 A.2d 1212

23 Conn.App. 287

Maxine GAUDIO v. Arthur GAUDIO et al.

No. 7630.

Appellate Court of Connecticut.

Argued April 3, 1990.

Decided Sept. 18, 1990.

Pat Labbadia III, for appellant (defendant Frank Eannelli).

Gaetano Ferro, with whom was Gina A. Pasquini, for appellee (plaintiff).

Before DUPONT, C.J., and DALY and FOTI, JJ.

DUPONT, Chief Judge.

This appeal stems from an action for dissolution of marriage and fraudulent conveyance brought by the plaintiff. Arthur Gaudio, the plaintiff's former husband, was the original defendant (Gaudio). Frank Eannelli was later joined as a defendant in the fraudulent transfer count of the plaintiff's complaint. Only Eannelli has appealed from the judgment of the trial court.

The trial court found certain facts relevant. The Gaudios were married in 1962 and separated in 1972 or 1973. The plaintiff filed the present dissolution action in 1985. During the time that the Gaudios lived together, the plaintiff cared for their home and child and worked with her husband in his business. She also allowed Gaudio to use funds from the sale of her house to pay his business debts. The court specifically found that the plaintiff's "contribution in general was at least as great as [Gaudio's] in the total marriage...." After the Gaudios separated, their son lived with the plaintiff until 1985, at which time he moved in with Gaudio. The plaintiff supported herself and her son with occasional help from Gaudio during the years between the separation and 1985.

While the Gaudios were living together, Gaudio owned some stock in Stamford Color Photo, Inc. At the time that the dissolution action was filed, he had become the sole stockholder in the corporation. The corporation's sole asset was a commercial building, from which Gaudio received $1600 per month in rent.

During the pendency of the dissolution and while Gaudio was in prison for a conviction of bank fraud, he was allegedly informed that Eannelli was interested in purchasing the stock in the corporation for $250,000. Prior to this, Gaudio knew that the Stamford Shelter for the Homeless was interested in buying the stock for $625,000 in order to acquire the building owned by the corporation.

On October 26, 1986, Gaudio allegedly sold his stock to Eannelli for $250,000, and received, in installment payments over a six month period, $110,000 in cash. The difference consisted of debts, including property taxes and a mortgage on the building, which he claimed were deducted from the sale price and paid by him from the cash proceeds. The court found, however, that several of these debts were undocumented and it questioned whether there ever actually was a payment of $110,000. No records of the alleged stock transfer were produced at trial.

After the alleged sale, Gaudio, acting as president of the corporation, proceeded to negotiate with the homeless shelter for the sale of the building and continued to collect the $1600 rent each month. On May 31, 1988, the building was sold to the shelter for $700,000. Gaudio and the secretary of the corporation were present at the closing and received $125,000 in cash, and mortgages totaling $575,000. The mortgages, however, had not been recorded as of the date of the trial.

When the plaintiff learned of the stock transfer she instituted a separate civil action against Gaudio, Eannelli and Stamford Color Photo, Inc., alleging a fraudulent conveyance of stock and seeking an injunction and a decree setting aside the conveyance. ¹ She later filed a motion, pursuant to Practice Book § 85, to make Eannelli a party in the dissolution action. The court, Landau, J., granted the motion and allowed the plaintiff to amend her complaint to include a count of collusion and fraudulent transfer against both Gaudio and Eannelli. Eannelli subsequently filed a motion to dismiss that was denied by the same court. The motion claimed that Eannelli should not be a party because he was not a party to the marriage or a correspondent in an adultery claim and because the court had no personal jurisdiction over him.

After a full trial, the court, Hon. Margaret C. Driscoll, state trial referee, dissolved the Gaudios' marriage and ordered Gaudio to pay the plaintiff $215,000 in lump sum alimony and $25,000 in attorney's fees. The court also found that the alleged stock transfer was fraudulent as to the plaintiff and ordered Eannelli to transfer the stock and the mortgages on the building to Gaudio. Gaudio, in turn, was ordered to take the necessary steps to obtain the stock and the mortgages and to turn them over to the plaintiff's attorney to be held in escrow pending execution of the judgment.

Although neither party has raised the issue on appeal of whether Eannelli was properly joined as a party to the dissolution action, we address it sua sponte because of its bearing on Eannelli's standing to appeal and because of our prior holding in Livsey v. Livsey, 11 Conn.App. 43, 525 A.2d 546 (1987).

In Livsey, the defendant husband in a dissolution action was awarded a sum to be paid by the plaintiff wife in the future. Subsequently, the husband assigned his award to a third party. The plaintiff was allowed to add the assignee as a party to her motion for modification made five years after the judgment of dissolution. We denied, sua sponte, the third party assignee standing to appeal from the judgment of modification.

We concluded that the assignee was not a proper party to the modification action. We recognized that "[t]here are certain categories of persons who are permitted [by statute] to intervene in a dissolution action"; id., 46; and determined that the assignee did not come within any of them. We reasoned that a dissolution judgment is unique in that it establishes the status and obligations of the parties to a marriage, and we held that such a judgment "cannot be opened at the request of a complete stranger to the original judgment." Id.; see also Manndorff v. Dax, 13 Conn.App. 282, 287, 535 A.2d 1324 (1988). Our opinion, although distinguishable on its facts, did not mention the Supreme Court's decision in Molitor v. Molitor, 184 Conn. 530, 440 A.2d 215 (1981), or our own decision in Derderian v. Derderian, 3 Conn.App. 522, 490 A.2d 1008, cert. denied, 196 Conn. 810, 811, 495 A.2d 279 (1985).

In Molitor, decided six years prior to Livsey, our Supreme Court tacitly approved the joinder to a dissolution action of a third party not within the statutory categories. The plaintiff in that case alleged that the defendant husband had fraudulently conveyed marital property to his uncle. The trial court allowed the plaintiff to add the uncle as a defendant, annulled the conveyance, and transferred the husband's interest in the disputed property to the plaintiff. Only the husband appealed, and the propriety of the uncle's presence in the action was not directly challenged. Addressing the plaintiff's challenge to the husband's standing to appeal, however, the court stated that "it is true that the [uncle] might have adequately contested ... the conveyance of the defendant's interest in the marital property" but noted that he had elected not to participate in the appeal. Molitor v. Molitor, supra, 184 Conn. at 533, 440 A.2d 215; see also Miller v. Miller, 22 Conn.App. 310, 311 n. 1, 577 A.2d 297 (1990). The court also stated that neither party to a dissolution action can frustrate the orderly adjudication of rights in marital property; Molitor v. Molitor, supra, 184 Conn. at 534, 440 A.2d 215; implying that neither party can exclude a third person with rights in marital property from participating in the dissolution action.

In Derderian v. Derderian, supra, a partition action brought by the transferee of a husband's interest in the marital home, the defendant wife counterclaimed, alleging a fraudulent transfer of the interest. The husband's interest in the property had already been awarded to the defendant in a separate dissolution action to which the plaintiff was not a party. In dicta, we cited Molitor for the proposition that "[t]he better practice would have been the joinder of the plaintiff in this case in the ... dissolution action so that the issue of the alleged conspiracy of the plaintiff with [the husband] to defraud the defendant of the marital asset could have been determined." Derderian v. Derderian, supra, 3 Conn.App. at 527 n. 6, 490 A.2d 1008.

Although the holding in Livsey appears to conflict with the dicta in Molitor and Derderian, the case is distinguishable on its facts, in that it involved a modification and did not deprive a spouse of a right to equitable distribution of marital assets. Moreover, the presence of the third party in Livsey was not required in order to adjudicate the property rights of the parties to the dissolution.

Because no Connecticut case directly addresses the issue of whether the transferee of an alleged fraudulent conveyance may be joined as a party in a dissolution action, we consider cases of other jurisdictions. The prevailing view in the majority of other jurisdictions is that a third person with a claimed interest in property that is the subject of a dissolution action may properly be joined as a party. That rule holds that although the spouses are ordinarily the only proper parties to a dissolution action, joinder or intervention of third parties is permissible where third parties claim an interest in property involved in the proceedings. 63 A.L.R.3d 373, Divorce-Third Parties' Claims § 2[a]; see, e.g., Long v. Long, 88 Cal.App.2d 544, 199 P.2d 47 (1948); In re Marriage of Allen, 691 P.2d 749 (Colo.App.1984); Breidenthal v. Breidenthal, 182 Kan. 23, 318 P.2d 981 (1957); Ravenscroft v. Ravenscroft, 585 S.W.2d 270 (Mo.App.1979); Schmidt v. Schmidt, 99 App.Div.2d 775, 472 N.Y.S.2d 26 (1984). The policy supporting this view is the desirability of avoiding multiple suits and of granting complete relief in a single proceeding.

Several jurisdictions...