Isham v. Isham

• Decision Date: 23 June 2009
• Docket Number: No. 18270.,18270.
• Citation: 972 A.2d 228,292 Conn. 170
• Court: Connecticut Supreme Court
• Parties: Carol L. ISHAM v. F. Lance ISHAM.

972 A.2d 228

292 Conn. 170

Carol L. ISHAM v. F. Lance ISHAM.

No. 18270.

Supreme Court of Connecticut.

Argued March 17, 2009.

Decided June 23, 2009.

Steven D. Ecker, Hartford, with whom, on the brief, was Jennifer L. Sachs, for the appellant (plaintiff).

Trisha M. Morris, with whom was Howard A. Jacobs, New Haven, for the appellee (defendant).

ROGERS, C.J., and NORCOTT, KATZ, VERTEFEUILLE and ZARELLA, Js.

KATZ, J.

The plaintiff, Carol L. Isham, appeals¹ from the decision of the trial court, denying her motion to inter alia, find the defendant, F. Lance Isham, in contempt of the judgment dissolving the parties' marriage for improperly basing his alimony payments to the plaintiff on his "salary" only, rather than on his employment "income," which includes bonus compensation, and to establish a payment schedule to satisfy the amount that the defendant had underpaid. The plaintiff claims that the trial court improperly determined that the alimony provision in the parties' separation agreement (agreement) was clear and unambiguous and did not include the defendant's bonuses. She also claims that the trial court improperly refused to permit the introduction of extrinsic evidence concerning the parties' intent with respect to the alimony provision. We conclude that the trial court improperly determined that the agreement was unambiguous, and we therefore reverse the judgment and remand for further proceedings.

The record reveals the following undisputed facts and procedural history. After twenty-nine years of marriage, the parties were divorced on March 9, 1993, in an uncontested hearing before the trial court, Karazin, J. At the hearing, the plaintiff's counsel, Christine O'Sullivan, indicated that the parties had reached an agreement and, without objection, requested that it be put on the record orally. The court agreed, and O'Sullivan recited the agreement into the record.

Although the agreement also disposed of the parties' real property, certain items of personal property and the defendant's retirement accounts, this appeal centers on the provisions requiring the defendant to pay alimony to the plaintiff. As read into the record, the agreement specified that the defendant would provide alimony to the plaintiff throughout her lifetime in "the sum of $150,000 for the first year, and $160,000 for the next two years following the date of the divorce, and $150,000 [per year] thereafter...." The agreement also provided a provision for the automatic adjustment of alimony, an issue of central importance in this appeal, which was recited into the record as follows:

"[O'Sullivan]: ... In the event that the [defendant's] salary shall increase by $100,000 over the current level, then his obligation shall increase by $20,000 to the [plaintiff] at that time. In the event that his salary shall decrease by $100,000, then his obligation to the [plaintiff] shall be reduced by $10,000. There is a provision, however, that if the [defendant's] salary shall be reduced below the level of $325,000, then he shall be free to seek a downward modification of his obligation for support.

"The Clerk: I'm sorry, I just need to get one thing.

"The Court: Sure.

"The Clerk: The sentence where the salary increases over $100,000, I didn't get that.

"[O'Sullivan]: For every $100,000 that [the defendant] gets an increase, [the plaintiff] gets $20,000. If his income should decrease by $100,000, his obligation for alimony decreases by $10,000.

"The Court: We're going to order the transcript, so just get sum and substance.

"[O'Sullivan]: We did indicate that if his salary should decrease below $325,000, that he can come back to the court to seek a downward modification. Upon retirement of the [the defendant], the [plaintiff] shall receive the lesser of: (A) one half of the [defendant's] pension income, or (B) her then current alimony. All obligations for support and maintenance of the [plaintiff] shall cease upon the death of the payor, the death of the payee, remarriage or one year cohabitation." (Emphasis added.)

Notably, the agreement set forth no definitions for the terms used therein. At the conclusion of the recitation of the agreement into the record, the trial court canvassed the parties as to whether they understood the agreement and whether they believed that it was fair and reasonable under the circumstances, to which both parties responded in the affirmative, and as to whether they had any questions concerning the agreement, to which they both responded in the negative. In accordance with their responses, the court expressly found that the agreement was fair and reasonable under the circumstances, that the parties had concurred in this assessment and that both parties had been represented by counsel. The court ordered the transcript of the hearing to be placed in the file and, stating that the transcript would be treated as a separation agreement, ordered that it be incorporated by reference into the decree of dissolution. The court did not order, nor did the parties request, that only certain portions of the transcript be designated as the separation agreement.

At the time of the dissolution in 1993, the defendant's employment compensation package consisted of an annual salary of $500,000, on which his presumptive "base" alimony obligation of $150,000 had been set, and various retirement plans; he did not receive any bonuses.² In 1996, however, his compensation package changed to include bonuses and stock options. His 1996 W-2 form reflected wages of $573,132, of which the defendant claims $500,000 was designated as salary, and he paid $160,000 in alimony. His 1997 W-2 form reflected wages of approximately $1.3 million, of which the defendant claims $646,154 was designated as salary, and he paid $167,319 in alimony. His 1998 W-2 form reflected wages of approximately $1.4 million, of which the defendant claims $757,692 was designated as salary, and he paid $190,000 in alimony. His 1999 W-2 form reflected wages of approximately $1.15 million, of which he claims $900,000 was designated as salary, and he paid $222,707 in alimony. From 2000 to 2003, the defendant's W-2 forms, as amended, and/or his federal 1040 form reflected wages of approximately $1.47 million, $3.1 million, $1.66 million and $6.58 million, respectively, of which he claimed $900,000 was annual salary, and he maintained his alimony payment for all four years at $230,022. Finally, in 2004, the year that the defendant retired, his 2004 W-2 form reflected wages of approximately $4.25 million, of which he claims approximately $225,000 was designated as salary, and he paid $219,434 in alimony.

The plaintiff filed a motion dated December 11, 2001 (contempt motion) seeking, inter alia, to: (1) hold the defendant in contempt for failing to comply with his alimony obligations under the 1993 dissolution decree; (2) modify the agreement incorporated into that decree to reflect the defendant's current annual compensation and commensurate alimony obligation; (3) compel the defendant to produce his tax returns from 1993 to the date of the contempt motion to ascertain the amount of the arrearage; and (4) set a payment schedule to satisfy the arrearage. The basis of the plaintiff's motion was her contention that the agreement had provided that her alimony would increase by 20 percent for every increase of $100,000 in the defendant's "salary/income." She claimed that the defendant had received both salary and bonus compensation as income but improperly had based his alimony payments on his salary only.

Prior to the hearing on the contempt motion, the plaintiff disclosed her intent to introduce expert testimony from Edward Axelrod, a certified public accountant, to establish that the alimony arrearage that had accrued was more than $2.9 million, not including statutory interest. She later expanded the scope of his proffered testimony to include the meaning ascribed to the terms "salary" and "income" by experts and laypeople, including the parties to the present case in the context of their agreement. The defendant moved to preclude this testimony, claiming that the interpretation of the agreement and the intent of the parties at the time that they entered into the agreement addressed the ultimate issue to be decided by the trier of fact, which is not a proper subject of expert testimony.

The trial court, Hon. Dennis F. Harrigan, judge trial referee, heard argument on the defendant's motion to preclude immediately prior to hearing argument on the contempt motion, during which the plaintiff's counsel in that proceeding explained: "Axelrod is not being offered to interpret this agreement, Your Honor, or to offer testimony as to the intent of the parties.... He is being offered to present testimony to the court as to the use of the word[s] salary and income in his experience as a licensed certified public accountant of many years experience and how the use of those words applies to [the defendant's] understanding of the agreement. And finally, to provide calculations with respect to the arrears that [the plaintiff] claims that she is owed." The trial court granted the motion to preclude on the ground that the expert testimony addressed the ultimate issue of the interpretation of the agreement.

The trial court then turned to the contempt motion and heard testimony from both parties and the defendant's accounting expert, Kenneth J. Pia, Jr. The trial court permitted the defendant to testify, over the plaintiff's objection, that he had interpreted his alimony obligations under the agreement to be limited to his salary.³ The court did not permit, however, the defendant to testify regarding his intent at the time the parties entered into the agreement. The trial court also refused to permit the plaintiff to testify regarding her understanding of the agreement or her intent at the time the agreement was formed.⁴ Pia was permitted to provide general definitions of salary and...