Greco v. Greco

Decision Date11 May 2004
Docket Number(AC 22797)
Citation847 A.2d 1017,82 Conn. App. 768
CourtConnecticut Court of Appeals
PartiesEILEEN N. GRECO v. GEORGE GRECO ET AL.

Lavery, C. J., and DiPentima and Stoughton, Js. James R. Greenfield, with whom was Kelly P. Lutz Mai, for the appellant (named defendant).

William F. Gallagher, with whom, on the brief, was Barbara L. Cox, for the appellee (plaintiff).

Opinion

LAVERY, C. J.

The defendant George Greco1 appeals from the judgment of the trial court dissolving his marriage to the plaintiff, Eileen Greco. On appeal, the defendant claims that the court, in fashioning its financial orders, (1) overvalued the defendant's stock in Greco's Auto Parts, Inc., (2) improperly awarded the plaintiff 98 percent of the parties' marital assets, (3) improperly relied on gross income, rather than net income, in determining the defendant's alimony obligation, (4) improperly ordered the defendant to pay alimony and other expenses that exceed his available income, and (5) abused its discretion in awarding the plaintiff $100,000 in attorney's fees. We agree with the defendant's third and fourth claims, which are interrelated, and, accordingly, reverse the judgment of the trial court.2

The following facts and procedural history are relevant to our resolution of the defendant's claims. The plaintiff and the defendant were married on September 28, 1974. It was the second marriage for both parties. At the time of the marriage, the defendant had custody of his five children from his prior marriage and the plaintiff had custody of a child born during her prior marriage. In 1997, DNA testing revealed that the defendant is that child's biological father. The parties also had a child together born during their marriage.

Before the parties were married, the defendant owned and operated a gasoline service station. After they were married, the defendant sold the service station and opened an auto parts business. The defendant's five children from his prior marriage were all involved in operating the auto parts business, Greco's Auto Parts, Inc., as was the parties' first child. The defendant also formed and controlled a partnership called LDGG Limited Partnership. Throughout the marriage, the plaintiff was a full-time homemaker, caring for the children and managing the household.

In February, 2000, the plaintiff brought this dissolution action by a one count complaint, claiming an irretrievable breakdown in the marital relationship. She sought the dissolution of the parties' marriage, an equitable distribution of the parties' property, alimony and attorney's fees. On September 25, 2001, the plaintiff filed a three count third amended complaint. The first count was directed against the defendant and was identical to the one count in the original complaint. The second count was directed against the defendant, the defendant's five adult children from his prior marriage, two "spray trusts" established for the parties' two children and the LDGG Limited Partnership. That count alleged that the defendant's transfers of certain assets were fraudulent in violation of the Uniform Fraudulent Transfer Act, General Statutes § 52-552a et seq., and, therefore, they should be set aside and the assets returned to the marital estate.3 The third count essentially was identical to the second count.

On October 11, 2001, the defendant filed an answer and a counterclaim for dissolution of marriage. On October 30, 2001, the defendant's five children from his prior marriage filed an answer, special defenses and a four count counterclaim.4 They also filed a claim for a jury trial. On that same date, the LDGG Limited Partnership and the trustee of the two trusts filed their answers and special defenses. On November 8, 2001, the plaintiff filed an answer and special defenses to the counterclaims of the defendant's five children from his prior marriage.5

After a lengthy trial, the court dissolved the parties' marriage on January 11, 2002, on the basis of irretrievable breakdown. The court also determined that the plaintiff failed to prove her "fraudulent transfer claims by the requisite clear and convincing evidence."6 The court, however, stated that although it would not set aside the transfers or include the assets involved in the marital estate, it would consider the defendant's removal of those assets from the marital estate in fashioning its financial orders. In its orders, the court ordered the defendant to pay to the plaintiff $710 per week in alimony until the death of either party, the plaintiffs remarriage or her cohabitation. It also ordered the defendant to maintain his life insurance for the plaintiffs benefit and to provide health insurance for her for three years. The court further ordered the defendant to transfer to the plaintiff his interest in the marital residence at 24 Sunbrook Road in Woodbridge. In addition, the court ordered the defendant to transfer to the plaintiff his stock in Greco's Auto Parts, Inc., or, alternatively, the value of that stock, which the court found to be $250,000. Finally, the court ordered the defendant to transfer to the plaintiff his individual retirement account, which was valued at approximately $9900, and to pay to the plaintiff $100,000 in attorney's fees. The defendant now appeals from those orders.

We address the defendant's third and fourth claims together because they are interrelated. The defendant claims that the court improperly relied on gross income, rather than net income, in determining the defendant's alimony obligation. The defendant also claims that the court improperly ordered him to pay alimony and other expenses that far exceeded his available net income. We agree with both claims.

Initially, we set forth our standard of review. "We review financial awards in dissolution actions under an abuse of discretion standard. . . . In order to conclude that the trial court abused its discretion, we must find that the court either incorrectly applied the law or could not reasonably conclude as it did." (Internal quotation marks omitted.) Evans v. Taylor, 67 Conn. App. 108, 111, 786 A.2d 525 (2001). "In making those determinations, we allow every reasonable presumption ... in favor of the correctness of [the trial court's] action." (Internal quotation marks omitted.) DiVito v. DiVito, 77 Conn. App. 124, 130, 822 A.2d 294, cert. denied, 264 Conn. 921, 828 A.2d 617 (2003). Mindful of those principles, we now turn to the issue of whether the court incorrectly applied the law by basing its financial orders on the parties' gross incomes.

"It is well settled that a court must base ... alimony orders on the available net income of the parties, not gross income." Morris v. Morris, 262 Conn. 299, 306, 811 A.2d 1283 (2003); see also Ludgin v. McGowan, 64 Conn. App. 355, 358, 780 A.2d 198 (2001).

In the present case, although the court, in its memorandum of decision, did not "affirmatively and expressly" state that it relied on the parties' gross incomes in determining its alimony order; see Morris v. Morris, supra, 262 Conn. 306; it did find that the defendant had "a $73,840 annual income from the auto parts business...." That amount is equal to the defendant's gross income as stated in his financial affidavit. In addition, in its financial orders, the court ordered the defendant to pay to the plaintiff $710 per week in alimony, which is precisely 50 percent of the defendant's gross income. Both parties submitted financial affidavits in which they stated their net income. The court, therefore, had before it evidence of the parties' net incomes, but failed to mention such income and, instead, focused on the defendant's gross income.7

The court's reliance on the gross incomes of the parties in fashioning its financial orders is further evinced by the fact that the court ordered the defendant to pay alimony and other expenses that far exceeded his available net income.8 The court ordered the defendant to pay alimony in the amount of $36,920 per year, life insurance premiums for the plaintiff in the amount of $12,480 per year and health insurance premiums for the plaintiff in the amount of $5972.16 per year. Those payments, when deducted from the defendant's gross income, as found by the court, leave the defendant with $18,467.84.9 The court also required the defendant to pay $20,000 per year toward the plaintiff's attorney's fees,10 which leaves the defendant with a yearly gross income deficit.11 Moreover, because the court awarded the plaintiff $720,936.56 out of the parties' $731,870.21 total marital assets, the defendant has virtually no assets that can be used to meet his annual deficit or to provide for his ordinary living expenses.

In addition, in light of the court's findings with respect to the defendant's age, health and ability to work,12 it is clear that the defendant's ability to earn income is entirely dependent on his control of Greco's Auto Parts, Inc.,13 and the source of that control is his sixty-five shares of stock in the corporation, which represent 53.3 percent of the total shares having voting power.14 In its orders, however, the court ordered the defendant to transfer to the plaintiff his stock in Greco's Auto Parts, Inc., or, alternatively, to pay to the plaintiff the value of that stock, which the court found to be $250,000. If the defendant retains the stock, the court gave him two payment options (1) a lump sum of $250,000 paid within ninety days or (2) a "promissory note in the amount of $250,000, providing for interest of 7 percent per annum, payable monthly over a ten year period, with adequate security." Thus, the court's order transfers control of Greco's Auto Parts, Inc., to the plaintiff or, alternatively, requires the defendant to pay funds to the plaintiff, which, in light of the court's other orders and findings, he does not appear to have.15

The court's order, therefore, in effect, requires the defendant to...

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12 cases
  • Loughlin v. Loughlin
    • United States
    • Connecticut Court of Appeals
    • 7 Febrero 2006
    ...in favor of the correctness of [the trial court's] action." (Citation omitted; internal quotation marks omitted.) Greco v. Greco, 82 Conn. App. 768, 772, 847 A.2d 1017 (2004), aff'd, 275 Conn. 348, 880 A.2d 872 (2005). To the extent that the defendant's claims require us to interpret the st......
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  • Szynkowicz v. Szynkowicz
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    • Connecticut Court of Appeals
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    ...court in Greco did not make any factual findings concerning the net income of the defendant, George Greco. See Greco v. Greco, 82 Conn.App. 768, 774 n. 9, 847 A.2d 1017 (2004), aff'd, 275 Conn. 348, 880 A.2d 872 (2005). In determining that the orders in Greco constituted an abuse of discret......
  • Hughes v. Hughes
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    ...of decision is devoid of any mention of the parties' net incomes." (Internal quotation marks omitted.) Id. In Greco v. Greco, 82 Conn.App. 768, 773, 847 A.2d 1017 (2004), aff'd, 275 Conn. 348, 880 A.2d 872 (2005), this court reversed the trial court's alimony order, which was based on gross......
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