Hughes v. Hughes

• Decision Date: 02 May 2006
• Docket Number: No. 25767.,25767.
• Court: Connecticut Court of Appeals
• Parties: Daniel HUGHES v. Pamela HUGHES.

895 A.2d 274

95 Conn.App. 200

Daniel HUGHES v. Pamela HUGHES.

No. 25767.

Appellate Court of Connecticut.

Argued November 14, 2005.

Decided May 2, 2006.

COPYRIGHT MATERIAL OMITTED

Gaetano Ferro, with whom were Brigid A. Connolly and, on the brief, Livia D. Barndollar, New Canaan, for the appellant (plaintiff).

Gary I. Cohen, Greenwich, for the appellee (defendant).

BISHOP, HARPER and MIHALAKOS, Js.

BISHOP, J.

The plaintiff, Daniel Hughes, appeals from the judgment of the trial court dissolving his marriage to the defendant, Pamela Hughes. On appeal, the plaintiff claims that the court improperly (1) relied on his gross income rather than his net income in fashioning the unallocated child support and alimony order, (2) ordered postmajority child support in violation of General Statutes § 46b-84, (3) awarded lifetime alimony, (4) awarded the defendant 50 percent of the plaintiff's stock options and restricted stock, and (5) considered the plaintiff's bonus that was paid in early 2004 as both a source of income and as an asset. The plaintiff also claims that the totality of the court's orders constituted an abuse of discretion. We affirm the judgment of the trial court.

The following facts and procedural history are relevant to our resolution of the plaintiff's appeal. The parties were married on September 10, 1994. They are the parents of three children, all minors. Claiming an irretrievable breakdown in the marital relationship, the plaintiff brought this dissolution action by a complaint dated August 9, 2001. He sought dissolution of the marriage, joint custody of the minor children and a division of the marital assets. The defendant admitted the allegations in the plaintiff's complaint and filed a cross complaint in which she sought dissolution of the marriage, sole custody of the minor children, child support, alimony and a division of the marital assets.

By memorandum of decision filed June 18, 2004, the court dissolved the parties' marriage and issued financial orders.¹ The plaintiff timely filed a motion to reargue, which was denied on July 28, 2004. This appeal followed.

As a preliminary matter, we set forth our standard of review. "An appellate court will not disturb a trial court's orders [financial or otherwise] in domestic relations cases unless the court has abused its discretion or it is found that it could not reasonably conclude as it did, based on the facts presented.... In determining whether a trial court has abused its broad discretion in domestic relations matters, we allow every reasonable presumption in favor of the correctness of its action.... We apply that standard of review because it reflects the sound policy that the trial court has the unique opportunity to view the parties and their testimony, and is therefore in the best position to assess all of the circumstances surrounding a dissolution action, including such factors as the demeanor and the attitude of the parties." (Citation omitted; internal quotation marks omitted.) Dombrowski v. Noyes-Dombrowski, 273 Conn. 127, 132, 869 A.2d 164 (2005). Mindful of these principles, we turn to the issues at hand.

I

The plaintiff's first three claims relate to the court's order of unallocated alimony and child support. The court ordered, inter alia: "The plaintiff shall pay unallocated periodic alimony and child support of 40 percent of the first $400,000 of his cash earnings in each year, 30 percent of the next $300,000 of cash earnings and 10 percent of the next $150,000 of cash earnings. Such earnings shall not include other forms of compensation such as stock options, restricted stock, [deferred profit sharing and employee stock ownership plans], capital accumulation plan or any other incentive awards. Payments shall be made monthly utilizing his base salary and the most recent cash bonuses paid for the prior year. Payments shall be made until the death of either party, the defendant's remarriage or her cohabitation as defined by [General Statutes § 46b-86(b)] and case law. This order is modifiable as to amount and is indefinite as to term subject to the limitations aforesaid. A wage withholding is entered." We address the plaintiff's three claims regarding this order in turn.

A

The plaintiff first claims that the court improperly relied on his gross income rather than on his net income in fashioning the unallocated alimony and child support order. Specifically, the plaintiff claims that because the court referred only to gross income and did not mention net income in its memorandum of decision, its order was based solely on gross income and was therefore improper. We disagree.

The parties acknowledge that the principle of law governing this issue is clear. It is well settled that a court must base its child support and alimony orders on the available net income of the parties, not gross income. Collette v. Collette, 177 Conn. 465, 469, 418 A.2d 891 (1979). Whether or not an order falls within this prescription must be analyzed on a case-by-case basis. Thus, while our decisional law in this regard consistently affirms the basic tenet that support and alimony orders must be based on net income, the proper application of this principle is context specific.

In Morris v. Morris, 262 Conn. 299, 811 A.2d 1283 (2003), our Supreme Court reversed the judgment of the trial court because, in that instance, the court expressly relied on the parties' gross incomes in modifying the defendant's child support obligation. The Morris court concluded: "Although the court broadly stated that its support order was based on financial affidavits, the court, nonetheless, expressly and affirmatively stated that the defendant has the following gross amounts which are properly included in his support income consideration . . . ." (Emphasis added; internal quotation marks omitted.) Id., at 307, 811 A.2d 1283.

In Ludgin v. McGowan, 64 Conn.App. 355, 358-59, 780 A.2d 198 (2001), this court reversed the judgment of the trial court because the court based its financial orders on the parties' gross incomes. There, we stated: "[T]he court repeatedly referred to and compared the parties' gross incomes.... Although the court had before it evidence of the parties' net incomes, it appears that the court chose not to rely on such information. The court's memorandum 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 income, even though the trial court did not affirmatively and expressly state that it had relied on the parties' gross incomes. In Greco, however, it was clear that the court relied solely on gross income because the financial orders far exceeded the obligor's available net income. Thus, the orders logically could only have been based on gross income.

In Kelman v. Kelman, 86 Conn.App. 120, 123, 860 A.2d 292 (2004), cert. denied, 273 Conn. 911, 870 A.2d 1079 (2005), although the trial court made reference to the parties' gross incomes in its decision, it did not expressly state that it was relying solely on gross earnings in framing its order. In affirming the trial court's decision, this court stated: "[T]he court specifically stated that it took into account the relevant statutes, the parties' testimony, the financial affidavits and the child support guideline worksheets, which included the parties' net incomes." Id., at 123-24, 860 A.2d 292.

Although the records in Morris, Ludgin and Greco supported the conclusions in those cases that the trial court's financial orders were based solely on the parties' gross incomes and not their net incomes, the record in this case does not compel such a conclusion. The case at hand is more analogous to Kelman. Although, in Kelman, the court's memorandum of decision referenced the parties' gross incomes, it did not state that it was relying solely on their gross incomes in fashioning its orders. Id., at 123, 860 A.2d 292. As in Kelman, the mere notation by the court of a party's gross earnings is not fatal to its support and alimony orders so long as its orders are not based on the parties' gross earnings.

In this case, the court noted the plaintiff's gross earnings to demonstrate their scope and variability in order to explain its reasoning for fashioning an order framed as a percentage of the plaintiff's gross earnings. The court stated: "The court lists the gross earnings of the plaintiff to illustrate the capability and ability he has displayed and the pay he has received for his efforts. Since his earned income fluctuates from year to year, the court will provide for a formula for the periodic alimony and child support. Each party has submitted a proposal in this respect in their proposed orders." Indeed, the plaintiff's proposed orders, filed on April 21, 2004, suggest an unallocated alimony and child support order on the basis of his gross annual cash compensation from employment.² The court further noted the gross and net values of the plaintiff's most recent cash bonus. Throughout its decision, the court made frequent reference to the parties' financial affidavits. The court also considered the tax returns, which disclosed not only the plaintiff's gross income, but also his total tax liability and, thus, his net disposable income. The court had before it ample evidence from which it could determine the plaintiff's net income and the respective financial needs and abilities of each party.

It is noteworthy, too, that the court also expressly considered the parties' proposed orders in which both parties proposed that the alimony and child support order should be unallocated and should be a function of the plaintiff's gross income. Although the court listed the plaintiff's gross earnings, taken from his tax returns for the years 1997 through 2003, unlike in Morri...