Spencer v. Spencer

• Decision Date: 06 August 2002
• Docket Number: No. 21722.,21722.
• Citation: 802 A.2d 215,71 Conn.App. 475
• Parties: Michelle L. SPENCER v. Edgar B. SPENCER III.
• Court: Connecticut Court of Appeals

802 A.2d 215

71 Conn.App. 475

Michelle L. SPENCER v. Edgar B. SPENCER III.

No. 21722.

Appellate Court of Connecticut.

Argued May 1, 2002.

Decided August 6, 2002.

COPYRIGHT MATERIAL OMITTED

LAVERY, C.J., and SCHALLER and MIHALAKOS, Js.

Walter A. Twachtman, Jr., for the appellant (plaintiff).

Timothy J. Fitzgerald, with whom, on the brief, was J. Patrick Dwyer, for the appellee (defendant).

MIHALAKOS, J.

The plaintiff, Michelle L. Spencer, appeals from the order of the trial court modifying the alimony and child support awards to be paid by the defendant, Edgar B. Spencer III. Each of the plaintiff's claims on appeal centers on whether the court improperly found that the loss of the defendant's employment formed a sufficient basis for modification of the support awards despite of a trust fund in which the defendant was, at the time of the dissolution, and continues to be a beneficiary.¹ We affirm the order of the trial court.

The following facts and procedural history are relevant to our consideration of the issues on appeal. On February 6, 1996, after a twenty-two year marriage, the plaintiff brought an action seeking dissolution of the marriage. The parties have three children: Colin and Martha were born on December 12, 1983; and Mallory was born on March 7, 1993. On May 14, 1998, the court, Barall, J., rendered judgment dissolving the marriage and, by agreement of the parties, retained jurisdiction for a later determination of custody, alimony, child support, property disposition and fees.

In February, 1999, the court, Bishop, J., heard evidence regarding the reserved issues and issued its memorandum of decision on March 23, 1999. The court awarded to the plaintiff the marital home located at 33 Hoskins Road in Bloomfield. The defendant had moved into his parents' former home on Duncaster Road, which also is in Bloomfield, after the parties separated in July, 1995. Recognizing that the parties resided fairly close to one another, the court awarded joint physical and joint legal custody of the children. After finding that the substantial amount of time the children were to be in the defendant's care warranted a deviation from the child support and arrearage guidelines, the court ordered the defendant to pay to the plaintiff $300 per week as child support for the three children and to purchase the children's clothing. In addition, the defendant was ordered to pay to the plaintiff $400 per week as alimony.

At the time of the dissolution hearing, the defendant was the president of Philbrook, Booth & Spencer, Inc. (Philbrook), a manufacturing firm that had been run by his family for many years, and earned a salary of $90,000 per year. The plaintiff was employed by Nadeau's Auction Gallery and was working eighteen hours a week for $9 an hour. The court found that the plaintiff held a bachelor of arts degree in art history and that she was underemployed.

In its memorandum of decision, the court also made certain findings pertaining to the trust. It found that the Margaret B. Spencer Irrevocable Trust was created for the benefit of the defendant and his sister. Furthermore, the court found that "the defendant is the beneficiary of an irrevocable trust which, in turn, is the beneficiary of an IRA with a principal value of approximately one million, one hundred and fifty thousand ($1,150,000) dollars as of December 31, 1998." The children's educational expenses were paid by the trust, and the defendant received direct distributions from the trust totaling $24,500 in the prior two years.

On February 2, 2000, the defendant filed a motion for modification of the alimony and child support payments. In his motion, the defendant claimed that the failure of Philbrook and his subsequent unemployment justified a modification of the support orders. After hearing evidence, the court, Gruendel, J., granted the defendant's motion for modification. In its memorandum of decision filed November 1, 2000, the court ordered him to pay to the plaintiff $125 per week for child support and reduced alimony to $1 per year. The court found that the "value of the trust has not changed substantially since the date of the judgment." Since the date of dissolution, the trust paid to the defendant $2500 per month from its income, totaling $30,000 per year. The defendant testified that he was in the process of changing the trustee and that the income generated by the trust was less than $2500 per month. The court found that "there is no evidence as to [the defendant's] present earning capacity. The court finds, however, that it is not less than the sum of $30,000 he had been receiving as direct income from the trust."

On November 20, 2000, the plaintiff filed a motion for rehearing or reargument to which the defendant objected. Thereafter, the court granted the plaintiff's motion, but denied the relief requested. This appeal followed.

In essence, the plaintiff argues that there was no substantial change in circumstances to form a basis for modification of the support orders. The linchpin of her argument is the defendant's interest in the trust. She argues that because the trust is worth approximately $1 million, the defendant's loss of his $90,000 salary is insignificant and does not constitute a substantial change in circumstances. The plaintiff's arguments are misplaced for two reasons: (1) the defendant's interest in the trust vested prior to the dissolution and was taken into account by the dissolution court; and (2) the trust contains a spendthrift provision that gives the trustee the sole discretion as to what, if any, funds are distributed to the defendant.

We first set forth our standard of review and the legal principles that govern our analysis of the issues on appeal. "A trial court is endowed with broad discretion in domestic relations cases. Our review of such decisions is confined to two questions: (1) whether the court correctly applied the law, and (2) whether it could reasonably have concluded as it did." (Internal quotation marks omitted.) Denley v. Denley, 38 Conn.App. 349, 351, 661 A.2d 628 (1995). "With respect to the financial awards in a dissolution action, great weight is given to the judgment of the trial court because of its opportunity to observe the parties and the evidence." (Internal quotation marks omitted.) Bornemann v. Bornemann, 245 Conn. 508, 530, 752 A.2d 978 (1998).

"[U]nder our statutes and cases, modification of alimony can be entertained and premised upon a showing of a substantial change in the circumstances of either party to the original dissolution decree.... Thus, once the trial court finds a substantial change in circumstances, it can properly consider a motion for modification of alimony. After the evidence introduced in support of the substantial change in circumstances establishes the threshold predicate for the trial court's ability to entertain a motion for modification ... it also naturally comes into play in the trial court's structuring of the modification orders." Borkowski v. Borkowski, 228 Conn. 729, 737, 638 A.2d 1060 (1994); see also General Statutes § 46b-86.² In general, the same factors used by the court to establish an initial award of alimony are relevant in deciding whether the decree may be modified. Borkowski v. Borkowski, supra, 736; see also General Statutes § 46b-82.³ The party seeking modification must prove the existence of a substantial change in the circumstances. Crowley v. Crowley, 46 Conn.App. 87, 91, 699 A.2d 1029 (1997).

When determining whether there is a substantial change in circumstances, the court is limited in its consideration to conditions arising subsequent to the entry of the dissolution decree. Schorsch v. Schorsch, 53 Conn.App. 378, 382, 731 A.2d 330 (1999). "To permit the trial court to reconsider all evidence dating from before the original divorce proceedings, in determining the adjustment of alimony, would be, in effect, to undermine the policy behind the well established rule of limiting proof of the substantial change of circumstances to events occurring subsequent to the latest alimony order — the avoidance of relitigating matters already settled." Borkowski v. Borkowski, supra, 228 Conn. 738, 638 A.2d 1060.

As a preliminary matter, we note that the modification court found that the dissolution court had awarded the trust to the defendant as part of the property settlement. The modification court further noted that "[p]rofits from an asset received as part of a property settlement are not income for purposes of determining whether there has been a substantial change in circumstances. Denley v. Denley, [supra, 38 Conn.App. 353-54, 661 A.2d 628]." The dissolution court acknowledged the existence of the trust and the defendant's interest in the trust, but did not award the trust to the defendant at the time of dissolution. As we will discuss, the court could not award the trust as part of the property settlement and, therefore, Denley does not apply to the present case.

To address the plaintiff's claims, we must also set forth the legal principles governing trusts generally and specifically the construction of a trust instrument. "The issue of intent as it relates to the interpretation of a trust instrument ... is to be determined by examination of the language of the trust instrument itself and not by extrinsic evidence of actual intent.... The construction of a trust instrument presents a question of law to be determined in the light of facts that are found by the trial court or are undisputed or indisputable." (Citation omitted; internal quotation marks omitted.) Cooley v. Cooley, 32 Conn.App. 152, 159, 628 A.2d 608, cert. denied, 228 Conn. 901, 634 A.2d 295 (1993). "[W]e cannot rewrite ... a trust instrument. The expressed intent must control, although this is to be determined from reading the instrument as a whole in the light of the circumstances surrounding the ... settlor when the instrument was executed, including the...