Weinstein v. Weinstein

• Decision Date: 23 September 2003
• Docket Number: (AC 22843)
• Citation: 79 Conn. App. 638,830 A.2d 1134
• Court: Connecticut Court of Appeals
• Parties: NANCY WEINSTEIN v. LUKE A. WEINSTEIN.

79 Conn. App. 638

830 A.2d 1134

NANCY WEINSTEIN v. LUKE A. WEINSTEIN.

(AC 22843)

Appellate Court of Connecticut

Argued April 29, 2003.

Officially released September 23, 2003.

Foti, Dranginis and Hennessy, Js. Lori Welch-Rubin, with whom was Susan W. Wolfson, for the appellant (plaintiff).

Wesley W. Horton, with whom were Karen L. Dowd and, on the brief, Linda T. Douglas, for the appellee (defendant).

Opinion

DRANGINIS, J.

The plaintiff, Nancy Weinstein, appeals from the judgment of the trial court denying her motion to open the judgment dissolving her marriage to the defendant, Luke A. Weinstein. In her motion, the plaintiff alleged that the defendant fraudulently misrepresented certain information in the financial affidavit that he submitted to the court at the time of the dissolution. On appeal, the plaintiff claims that the court abused its discretion in denying her motion because she presented sufficient evidence of fraud. We affirm the judgment of the trial court.

The court found the following facts. After nearly seven years of marriage, the parties' marriage was dissolved in May, 1998. One child was born during the marriage. Following a two day dissolution trial, the court entered orders for custody, visitation, alimony, medical expenses and insurance coverage. The judgment also ordered the defendant to pay to the plaintiff $100,000 as a property settlement within sixty days. Two weeks later, the defendant filed a motion for reconsideration and for reargument, which the court denied.

At the time of the dissolution, the defendant owned a minority interest in a small computer company, known as Product Technologies, Inc. During the pendency of the matter, the plaintiff had deposed the defendant, requesting financial information about the value of his interest in the company. At trial, her expert witness, Kenneth Pia, submitted a report to the court containing his valuation of the defendant's share in the company, which he made on the basis of the financial information contained in the defendant's deposition, discovery and other representations, including the defendant's sworn financial affidavit. Subsequently, the parties stipulated to and the court adopted the $40,000 value the defendant's expert placed on the defendant's minority interest.

In October, 1998, five months after the entry of the judgment of dissolution, the defendant's company was sold to ICL, Inc., another software company, for $6 million. Thereafter, the plaintiff filed a motion to open and to vacate the judgment, asserting that the defendant fraudulently had misrepresented material information during discovery, and in his deposition and financial affidavit.¹ After taking evidence and hearing argument, the court, in a well reasoned thirty-nine page memorandum of decision, ruled against the plaintiff, finding that she did not proffer clear and convincing evidence that the defendant had made fraudulent misrepresentations to her regarding his financial status. The court predicated its conclusion primarily on the fact "that the plaintiff has not proved, even by the lower preponderance of the evidence standard, that the defendant knew of the eventual sale to ICL, Inc., as of the time of trial on April 15 and 16, 1998. The evidence is clear that ICL, Inc., had not proposed, or even broached, acquisition until June 15, 1998." Thereafter, the plaintiff filed a motion for reconsideration and for reargument, which the court denied. She then filed a motion for permission to file a late articulation, along with a proposed motion for articulation. This court denied those motions. The plaintiff now appeals from the trial court's decision.

The plaintiff claims that the court improperly failed to find that the defendant fraudulently had misrepresented his financial condition at the time of the dissolution of marriage. Specifically, she asserts that the defendant's failure to mention the existence of the company's private placement memoranda² and to disclose the fact that a sale of the company was pending, or that ICL, Inc., had offered to buy the company, in his responses to her discovery requests, constituted fraud sufficient to open the judgment of dissolution. The plaintiff further asserts that if she had known about the private placement memorandum, she would not have stipulated that the defendant's minority interest in the company was only $40,000. Finally, the plaintiff maintains that because the dissolution court based its valuation on the parties' stipulation, it would have reached a different result if there were a new trial. We disagree. We begin by setting forth the applicable standard of review that governs our consideration of the plaintiff's claim. "Our review of a court's denial of a motion to open [based on fraud] is well settled. We do not undertake a plenary review of the merits of a decision of the trial court to grant or to deny a motion to open a judgment.... In an appeal from a denial of a motion to open a judgment, our review is limited to the issue of whether the trial court has acted unreasonably and in clear abuse of its discretion. . . . In determining whether the trial court abused its discretion, this court must make every reasonable presumption in favor of its action. . . . The manner in which [this] discretion is exercised will not be disturbed so long as the court could reasonably conclude as it did. . . .

"Fraud consists in deception practiced in order to induce another to part with property or surrender some legal right, and which accomplishes the end designed.. . . The elements of a fraud action are: (1) a false representation was made as a statement of fact; (2) the statement was untrue and known to be so by its maker; (3) the statement was made with the intent of inducing reliance thereon; and (4) the other party relied on the statement to his detriment. . . . A marital judgment based upon a stipulation may be opened if the stipulation, and thus the judgment, was obtained by fraud.. . . A court's determinations as to the elements of fraud are findings of fact that we will not disturb unless they are clearly erroneous. . . .

"There are three limitations on a court's ability to grant relief from a dissolution judgment secured by fraud: (1) there must have been no laches or unreasonable delay by the injured party after the fraud was discovered; (2) there must be clear proof of the fraud; and (3) there is a substantial likelihood that the result of the new trial will be different. . . ." (Citations omitted; emphasis in the original; internal quotation marks omitted.) Mattson v. Mattson, 74 Conn. App. 242, 244-46, 811 A.2d 256 (2002).

Resolution of the plaintiff's claim requires us to state certain additional facts. At trial, the defendant testified that his company and ICL, Inc., had worked together for four years, developing and selling smart card systems. In March, 1998, their business relationship began to deteriorate and that by virtue of a termination clause in their software licensing agreement, ICL, Inc., sent to Product Technologies, Inc., a notice of termination, effective September 26, 1998.

Despite the tension between the two companies, they met in April, 1998, in London. The defendant attended that meeting. The exact purpose for the meeting is not clear. Following that meeting, Philip Eames, the managing director of the smart card business for ICL, Inc., and Ross Bailey, a longtime employee of ICL, Inc., began to look at the defendant's company with an eye toward how it would fit into the overall smart card strategy of ICL, Inc. In mid-June, 1998, the defendant and William J. Mangino, Jr., the principal stockholder and president of Product Technologies, Inc., and Eames and Alan P. Wain, the in-house counsel for ICL, Inc., met at the office of Product Technologies, Inc., in Middletown. At that meeting, the defendant and Mangino claimed that Product Technologies, Inc., had superior rights to the jointly developed software. In the hope of avoiding litigation, ICL, Inc., offered to purchase the company for $2.5 million. Subsequently, the defendant and Mangino rejected that offer as too low. Wain exchanged letters with the defendant and Mangino. Each letter expressed substantially the same concern, which was with the ownership of and the intellectual property rights to the software.

One week later, Eames called Mangino to schedule another meeting. On July 1, 1998, the defendant and Mangino signed a memorandum of understanding with ICL, Inc., which set forth its acquisition of Product Technologies, Inc., for $6 million. As a result of the sale, the value received by the defendant for his minority interest in the company was $1,449,721. Less than three months before the defendant signed the memorandum of understanding, he had claimed the value of his interest to be $40,000.

We now turn to the merits of the plaintiff's appeal. The plaintiff argues that the court adopted too narrow an interpretation of her discovery requests. At the hearing, she introduced three interrogatories and one request for production of documents into evidence. The sixth interrogatory asked the defendant to disclose any information about the sale or purchase of the company. The seventh and eighth interrogatory and the first request for production of documents were aimed specifically at uncovering whether the defendant had applied for new financing and, if so, from whom and when. In finding no fraud, the court performed a careful step by step analysis of the defendant's responses to the plaintiff's discovery requests, limiting its review of the defendant's responses to only those requests that the plaintiff had introduced into evidence.

With respect to the sixth interrogatory, concerning the sale or purchase of the company, we first note that the defendant gave his sworn responses on December 16, 1997. There is no evidence that ICL, Inc., had approached Product Technologies, Inc., about a purchase before that date. The...