Opinion
No. FST FA 05-4007422
October 25, 2007
Memorandum of Decision
This dissolution of marriage action came before the court by writ, summons and complaint returnable to the court on November 29, 2005.
The plaintiff in her claims for relief seeks alimony to be calculated as 30% of the defendant's non-deferred gross income to continue until the death of either of the parties, her own remarriage or "co-habitation per Connecticut General Statutes", a property distribution of 60% of certain of the assets of the marriage and 50% of certain deferred compensation benefits of the defendant, payment of her attorneys fees by the defendant and certain orders regarding indebtedness claims and sundry personal property of the parties.
The defendant in his claims for relief offers the court to order he pay alimony to the plaintiff as 20% of his cash income from employment until the death of either party, the plaintiff's remarriage or civil union, the termination of alimony by the court pursuant to C.G.S. 46b-86(b) or the defendant's retirement. He seeks a property distribution which will reflect his award of 55% of the assets and the plaintiff's receipt of 45% of the assets except: he seeks to be the sole owner of certain unvested employment-related assets and his interest in the AIG Retirement Plan. He also seeks an equal division of frequent flier miles, each party to pay their own attorneys fees and keep their personal items, and orders regarding the 2006 IRS Tax Return.
The defendant offers cash income as the sum left after deduction of amounts paid or withheld for social security, i.e. OASDI and Medicare.
In addition to these matters before the court for determination, the parties entered into a stipulation that an $11,000.00 per month payment from the defendant to the plaintiff from January 2007 to the trial be characterized by the court as a part of this decision as either taxable or non-taxable to the plaintiff and deductible or nondeductible by the defendant; essentially, the court is to determine whether it is to be treated as pendente lite alimony for tax purposes.
In rendering this decision and making the ensuing orders, the court has carefully considered the statutory criteria found in 46b-81 and-82 regarding alimony and assignment of the marital estate, respectively, and 46b-62 regarding attorney fees, the case law as it has developed regarding these matters and such other relevant federal and state law regarding the issues before the court. The court has had the opportunity to observe the demeanor of the witnesses, including the parties over the time of the trial which occurred on September 20, 21, 25, 26, and 27, and October 2, 2007. In addition to the parties, the court received testimonial evidence from Jane Callahan, Harry Carrel, Ted Yudain, Saul Rothman, Patrick McCabe, Lynn Genovese and Tom Ward, Jr. There were numerous full exhibits, each of which was examined by the court.
The court makes the following findings.
The court finds it has jurisdiction over the action. The plaintiff has resided in the state for more than one year prior to the bringing of the action. The plaintiff whose birth name was Elaine Sklar married the defendant, Franklin Davis, on September 7, 1968 in Long Island, New York. The parties had two children of their marriage, both of whom are adults, aged 27 and 28 years, respectively. The parties have not been recipients of public assistance. The marriage between the parties has broken down irretrievably. There is no hope for reconciliation of the parties to their marriage.
The plaintiff is 63 years old; she was born May 4, 1944 in New York. By way of formal education at the time of the parties' marriage, she had achieved a Bachelor's Degree, cum laude in 1965 from the University of Michigan, in speech pathology. Subsequent to her education she returned to New York. At the time that the parties dated and then married, she was working as a production assistant at WOR-TV in New York. She lost that employment. In 1973, the plaintiff was awarded a master's degree from Manhattanville College in education.
The plaintiff founded the Greenwich Repertory Theater and invested significant time and energy in the project. She also had a radio show.
She also worked for approximately one year each at Greenwich Country Day School and the Masters School. Her work was as a drama teacher.
Thereafter, the parties moved to Florida for a year. On their return she was a substitute teacher in the Greenwich school system. The parties' first child was born on January 27, 1979 and the second child was born on May 4, 1980. The plaintiff did not seek employment outside the home during this period.
Thereafter, she became a licensed swim teacher and lifeguard at the local YWCA. Subsequently, as the children went to preschool and then elementary schools she procured employment at the schools for approximately one year each for the first several years.
The plaintiff then worked with Jane Callahan, her closest friend, producing parties for children and writing party books. The party production was labor intensive taking some 70 hours to prepare a party before it occurred. Much of this work was done at the Davis home. These women have authored 12 party books, all of which took many hours to create; none of them, however, have been published — they remain a work in progress from the 1950s to the present.
Over the time of the parties' marriage, the plaintiff has also been a prolific writer and artist in other areas. She has painted murals on children's bedroom walls, created and sold pictures, written a novel and many plays, among other things. For all of these creative efforts it appears that it was largely for self-satisfaction, inasmuch as the income producing result was modest and far outweighed by the costs.
The plaintiff is not employed outside of her home. She invests significant time daily to writing and other associated creative projects that do not currently provide her with an income. No evidence was offered as to a recent or future earning capacity for the plaintiff; accordingly, the court finds none.
The plaintiff's health by appearance is robust. However, she reports migraine headaches, problematic recovery from back surgery resulting from a motor vehicle accident, no sight in one eye and inhibited sight in the other eye, and ongoing dental problems. She receives periodic botox treatments; the court concludes they are cosmetic inasmuch as the need for the same medically was not placed in evidence before the court. Her health insurance is provided through her husband's employment.
The plaintiff enjoys downhill skiing, ice skating, and ice hockey. She has taken a year off the ice hockey while she recovers from the above mentioned motor vehicle accident. She has attended ice hockey school annually in New Hampshire over the last five years.
The defendant is 67 years old; he was born on January 26, 1940 in London, England. His formal education includes graduation in England from an aviation high school and associated technical college. He has procured licenses and further certification for work on aircraft and ultimately certification and licensing as a pilot, to include jets of all sorts. The defendant then served in the U.K. military. He emigrated from England to the United States in 1965, three years before the parties' marriage. Defendant immigrated with no appreciable assets.
At the time the parties met in 1966, the defendant was employed by Combustion Engineering, first as a flight engineer, later as a pilot. In 1975 he lost that job and procured a job as a pilot for the founder of Fisher Controls. The parties moved to Florida. When Mr. Fisher became ill and the defendant learned his employment would ultimately terminate, he interviewed for and received a job offer in California. The plaintiff, however, wished to move back to Connecticut and so the defendant sought and found a different job as a pilot, with Volkswagen. The parties relocated to Connecticut. The defendant stayed with Volkswagen until 1978 when he went to work for AIG.
The defendant has remained employed with AIG to the present time as a pilot. He is presently, in addition to being an active pilot, director of corporate aviation. His work is, and has been since 1979, out of Teterboro, New Jersey. Inasmuch as the parties resided in Cos Cob (a postal address within Greenwich) since 1978, his work day has always involved that round trip commute when he was not flying. Throughout the marriage, the defendant's employment presently requires him to be away from home roughly 60% of the time — the percentage of time away on flights was greater earlier in his career; most of his flight obligations have been international routes. The defendant has been eligible to retire for two years, since his 65th birthday. While he has not made specific plans to retire, he is contemplating a retirement within the next year. At 67 years of age, the defendant has worked a full lifetime for himself, his children and his wife. He should feel free to retire at a time of his selection, his health and employer allowing for the same.
The defendant's income is composed of three components: his present base salary of $380,000.00 per year gross income, supplemental bonus of $85,000.00 paid quarterly and discretionary bonus paid at year end based on AIG's performance. Year to date, AIGs stock performance has been poor in the sense that it has lost value. The supplemental bonus that the defendant receives now will not be payable starting next year inasmuch as it is being replaced by another form of compensation explained below. The plaintiff also receives a portfolio of benefits including deferred compensation, term life insurance and health insurance. As a result of corporate reorganization issues not relevant to the matter at hand, a portion of the defendant's income and benefits is paid by AIG and a portion is paid by Starr International, an Irish corporation.
Pendente lite, the parties agreed and the court ordered them to file joint 2006 Federal and State tax returns. The return has been prepared but not filed. Apparently, though it has not been made clear, the plaintiff first seeks and indemnification for the defendant relating to the return. The return shows the defendant's earned income in 2006 was $1,195,240.00. The defendant is also collecting his OASDI social security benefits. In 2006 they were $24,424 of which $20,760 was taxable. For 2007 his gross benefit is $25,500 (assuming no further raise for the year). If it is taxed at the 2006 rate, the net benefit for 2007 will be $21,675. The court notes that the parties also pay New York State and City Tax.
The defendant's financial affidavit discloses a net of $27,197.00 per month for all income excluding social security and interest and dividend income. From that he has paid the plaintiff the agreed court ordered sum of $11,000.00 which is the sole income received by the plaintiff. The plaintiff's counsel was advised by the court at the beginning of the trial that it would be useful to know her projected OASDI income (and at what ages the values applied); notwithstanding that, the evidence was not offered at trial. The court notes that as a matter of Social Security law, inasmuch as the parties have been married over 10 years, the plaintiff is entitled to spousal benefits at the rate of one-half of the defendants benefit. Since she has achieved the age of 62 years and the defendant is currently eligible for Social Security OASDI benefits, the plaintiff is immediately entitled to them as well, though the sum is permanently reduced if she collects early. The plaintiff is entitled to Medicare at 65 years of age.
The parties' marriage has not been a happy one for either party. They appear ill-suited for each other. The plaintiff asserts that the defendant raped her on their wedding night and that through the balance of the marriage he was cold and not affectionate. The defendant denies that he ever assaulted his wife; he found her to be cold and disinterested in sex during the marriage. The plaintiff had no interest in the defendant's career; she was bored with aviation and the defendant's travels. She resented the time the defendant spent away from home for work; at the same time, she did not appreciate his presence when he was home. She begrudgingly acknowledges that he was a good father "when he was there." The best attributes she can ascribe to him was that he was handsome and a good provider. The defendant found the plaintiff's habits annoying. Likewise, he begrudgingly acknowledges that she was a good mother. He found her lacking as a homemaker; she denies those assertions. The only avocation they appeared to share on any sustained basis during their marriage was skiing in Vermont. When the plaintiff was involved full-time with the Greenwich Repertory Theater, the defendant pitched in financially and helped with building sets. The plaintiff sought to minimize his efforts. The plaintiff resented the year in Florida and minimizes the value of the defendant having located their home there very close to her parents. Essentially, there was nothing either party could do that made things `right' for the other. That said, however, the court finds the plaintiff's credibility was lacking on many of the questions as to whether each party engaged in bad conduct during the marriage. Her failure to tell the truth about a brief romantic interlude with another man over 30 years ago was relevant not for purposes of the breakdown of the marriage; instead, it was relevant because it adversely affected the court's view of her credibility.
Throughout most of the marriage the plaintiff handled the family's financial books. She was responsible for paying the bills. In 1991, she began to secretly horde funds in cash in a safe deposit box. Her reason for doing so was to have funds for an attorney in the event the defendant filed for a divorce. He had told her he was thinking of leaving. Ultimately she took the funds which were approximately $40,000 in cash and attempted to deposit them in a bank account with Putnam Trust. The bank, while denying it was a result of that act, immediately notified the Davis family that it was closing all of their bank accounts. As a result thereof, the plaintiff was forced to notify the defendant of the cash funds. At that point he not only became visibly very angry with her, the defendant internally determined he could no longer trust his wife.
In 1996 the plaintiff notified the defendant her friend Jane Callahan was going to stay with them. She lived in the Davis family home, in the bedroom adjacent to the parties' for approximately 18 months. During that time Callahan and the plaintiff spent many hours together working on their projects and talking privately. The defendant was isolated from them. Callahan's presence created further tensions between the parties: the defendant repeatedly told the plaintiff that he wanted Callahan to leave, that she could get a place of her own because she was employed, but the plaintiff refused. The court finds that the companionship that Callahan provided to the plaintiff was helpful to her but ultimately hurtful to the parties' marriage.
In 2000, the plaintiff's mother, Rose Sklar, came to an engagement party for one of the parties' children and then stayed for five years in their home. Initially she lived in the bedroom that had housed Callahan. Ultimately, the parties finished and outfitted the basement of their home for her. She lived with them until she had a stroke in January 2005. During the entire time she stayed with them, the parties supported the plaintiff's mother from the defendant's earnings. Immediately after the stroke, on January 25, 2005, she executed a power of attorney in favor of the plaintiff.
The plaintiff, utilizing the power of attorney, liquidated the one major asset her mother had, an annuity. In February 2005, the annuity funds ($476,700.29) were all deposited in accounts of the parties or utilized to pay down debt in their names. $186,000.00 was utilized as a payment toward the parties' current home in Vermont, $234,000 paid down a loan for the parties' boat and the balance went into the parties' joint Wachovia account. The plaintiff claims that the funds from her mother constituted a loan to the parties. During the pendency of this action the plaintiff utilizing her power of attorney caused a lawsuit to be brought in her mother's name against herself and the defendant, claiming a loan for the funds in default, constructive trust, and fraudulent retention of the funds. The lawsuit is still pending in court. There have been no withdrawals or releases relating thereto. The attorney who purported to bring the lawsuit for the mother did not do any of the significant drafting for the same or speak to the mother before the action was brought. All of the work for the same was accomplished by the plaintiff's own attorney.
There is no promissory note or similar written document evidencing a loan. The plaintiff's mother who is now 100 years old was not called as a witness by the plaintiff either in person, or, through deposition testimony. The defendant denies that the funds were a loan. The court finds the plaintiff has failed to prove that the funds received were a debt to be repaid. The funds did confer a benefit on both of the parties. Likewise, the parties conferred a benefit on the plaintiff's mother by supporting her for five years, including paying her in-home care providers, and then paying her nursing home bills, around the clock private care and other accessory items (less what she paid from her Social Security) since her entry there in 2005. The plaintiff asserts that she is a `responsible party' for her mother's nursing home bills.
Over the years the parties have owned two different homes in Stowe, Vermont. Their first home was a condominium which they sold. The plaintiff handled the transaction solely. From that transaction the plaintiff received $10,000 that she did not deposit in a joint account. The ultimate disposition of that sum is not known.
The parties then built another home in Stowe which they currently own now. It is on a lot located by the defendant after the then CEO of AIG told him abut the development and a club that would be built with it. The parties built a home there. They both participated in it, the plaintiff responsible for interior design and furnishing aspects and the defendant responsible for overseeing the actual construction itself. The property has a stipulated value of $2,450,000.00. It has a $1 million mortgage and a line of credit secured on it of approximately $47,000.00. The parties also joined the Founders Club which has a membership of 300. It has a golf course and many other activities intended to be supported. While the stated buy-in price was $50,000, the court finds that the club members also agreed to the charitable contribution of $150,000 for activities of the club. The parties paid both sums. The court finds its value to be $200,000.00.
Both of the parties want the Stowe property. The plaintiff is emotionally invested in the property. She wants to be involved with the drama activity there and a theater that she understands the Founders Club will support. She likes the fact that there are no highways to drive on there because she does not drive on highways. The defendant wants the property because it and the Club are full of AIG colleagues and friends; he plays golf and so would utilize the golf course. The mortgage, taxes and home equity loan on the property, without the monthly costs, are over $8,000.00 per month. The property has been rented in the past but is currently vacant.
In September 2005, the parties' second daughter was married at the Stowe home. The plaintiff was very invested in the planning and execution of this multi-day event. The defendant evidenced poor judgment and insensitivity in choosing the timing of this occasion to tell the plaintiff that he was leaving her. While the plaintiff could not rationally have harbored an illusion as to the health of her marriage, all of the insecurity and anxiety that comes with divorce befell her at an emotionally charged time that should have been full of sentimental satisfaction for both parents. This the defendant stole from the plaintiff.
The plaintiff wants the court to find that the defendant's relationship with another woman over the preceding year was the reason for the break-up of the marriage. The court expressly declines to so find. The parties' marriage had long ago broken down, the result of the parties' mutual indifference to each other, irritation at the lifestyle and values of each other and disappointment each harbored that their mate had not turned out to be the person they thought they had picked. Ultimately, the court finds both parties contributed to the breakdown of their marriage and neither should be held more culpable or responsible than the other.
During the pendency of this action, the parties sold their Cos Cob home. The plaintiff, who was residing in the home, was primarily responsible for all of the dealings with the real estate agent regarding the sale of the home. For reasons that were never adequately explained by her, she passed up a solid written offer to purchase the home from Harry Carrel (who lived on the same street) for $2,000,000.00. Her explanation that the realtor had the duty of telling the defendant of that offer does not explain her total lack of initiative in responding to what turned out to be a very good offer for the property. For instance, she could have signed the contract, or counter-offered. Apparently she did nothing. Instead the property ended up selling for $1,745,000.00 or $255,000.00 gross less. The defendant only became aware of the $2 million when he received an email from Carrel, who had once worked at AIG. The proceeds of the sale of the home were escrowed. By agreement each party received $25,000.00. The plaintiff has spent her share. The defendant retains his share in an account shown on his financial affidavit. The balance of the proceeds have been held in escrow by Tom Ward, Jr. an attorney at Ivy, Barnum and O'Meara, who has not charged the parties to date for his escrow services. The escrow started at $348,293.12. On or around April 2006, the parties requested he pay $7,000 monthly on account to Rose Sklar's bills from the funds. After accounting for these withdrawals, the escrow's current balance is $129,566.99.
In September 2006, the defendant notified the plaintiff that he was utilizing $11,000.00 of the escrow to pay her monthly allotment because he was without liquid funds from his income. This was consistent with the plaintiff's testimony that as the family bookkeeper over the years she would utilize funds from the parties' credit lines and then pay the debt back when the defendant's bonuses would come in.
During the pendency of this action, similarly the defendant has increased the parties' indebtedness on their line of credit from around $300,000 to $700,000 its maximum. While the plaintiff has complained of this during the trial, she has not pointed to any significant excess sums paid by the defendant for discretionary items during the pendente lite period. The plaintiff's own aid to the court's submitted with final argument expresses many of the expenditures that significantly exceeded income during this action. The monthly expenses on the defendant's financial affidavit exceed the yearly income amortized out monthly by almost $26,000.00 per month. It is this shortfall that has caused the defendant to draw down the credit line, which he now services at approximately $4,390 per month.
For the purpose of this calculation, the court did not count the monthly payments for Rose Sklar currently coming out of the escrow. The court notes no legal obligation of the defendant to support her. Absent any voluntary assumption of the support of her mother, the plaintiff likewise has no legal obligation to support her. Notwithstanding the claims of the plaintiff, the court may not consider any such assumed obligation in setting the alimony award or awarding the marital estate. The court has appropriately noted the benefits the parties have conferred on Rose Sklar and the benefit she has conferred on them during the marriage.
The parties also own a 46 foot 2004 Carver boat which has a stipulated value of $434,000.00. The plaintiff drives a 2006 Subaru Tribeca, which is titled in the defendant's name. It is in this vehicle that she had the single car accident mentioned above. The vehicle has been repaired. The court finds its value to be $22,000.00. There is no quarrel with the plaintiff retaining the car and it being titled in her name.
The parties have a variety of personal furnishings, art, electronics and jewelry, as well as their personal effects. Based on the credible evidence, the court finds the parties' art collection to be valued at $40,000.00 and the electronics in the Stowe home to have been purchased and installed for $60,000.00 along with furnishings valued together for approximately $200,000.00. The electronics must be devalued at this point, but they add value to the real estate as installed. The furnishings of the parties' respective apartments are of indeterminate value. The plaintiff's jewelry likely exceeds the $10,000.00 placed on it in her affidavit based upon the purchases in the last two years alone. However, the court lacks sufficient evidence to know its real value.
The parties each have bank accounts listed on their financial affidavits with values attached to them. The court finds the values as indicated on each party's respective affidavit but expressly notes that the defendant's Citibank account at IV.B.4. is not subject to distribution, having already been distributed.
The defendant also has a securities account (Wachovia) which houses his shares of AIG that he currently owns outright. He owns 27,561 shares of AIG stack which at the time of his affidavit (September 20, 2007) was trading at $64.97 per share. These largely represent shares acquired by the defendant through the exercise of options or the payment of SICP shares accrued to him as part of his compensation and benefit package as an AIG/SICO employee dating back to 1989. The gross value of the stock is $1,790,638, subject to fluctuations in the market value of the shares. The outstanding $700,000 margin loan referred to above is secured against these shares; at its current maximum amount its carrying costs are about $4,390 per month.
The defendant also holds options on AIG stock. The defendant's financial affidavit summarizes the different traunches of the options, providing the detail of their respective price, the expiration date on the opportunity to exercise the options, the grant date and the vesting date of the non-vested options. Having examined the evidence, the court concludes that the information provided on the affidavit is substantially accurate. The court notes that the values of each of the option shares is as measured against the September 17, 2007 share price of $64.97. They can best be characterized as follows. Of the options listed at schedule C and the values assigned to them, it should be noted that the defendant has exercised the option on the 3,812 shares granted on December 14, 1998 for the purpose of liquidating them to pay household bills. The shares are subject to taxation; while no accountant testified, the defendant understands these funds to be taxed at ordinary income rates. Of the options granted in the period from 2003 to 2005, some of the shares are incentive and some are characterized as non-qualified.
On June 26, 2006, after the commencement of this action the plaintiff also received 10,740 restricted shares, in four traunches, which are available on January 1 2010, 2012, 2011 and 2013 respectively. Finally, on December 11, 2006 he received 2,500 restricted shares which will be available to him on December 11, 2010. All of these restricted shares granted in 2006 are available to the defendant at his retirement. If he were terminated for cause, which the court finds highly unlikely as a result of an unblemished career in excess of 29 years, he would lose them.
There are numerous assets that have accrued, will accrue and may accrue to the defendant from his employer. It is these matters that add complexity to this dissolution of marriage action. For purposes of clarity, it is best first to list what they are, describe them and then consider how their attributes measure up as property subject to distribution under our evolving definition in Connecticut.
The defendant currently has two retirement plans with AIG. The first is a defined benefit plan which will make periodic payments to him on his retirement. While the court was not provided a present value of the plan, projected payments on the hypothetical retirement date of February 1, 2008 were provided. The single life payment monthly, by way of example, is $11,540.20. Similarly, the 50% joint and survivor annuity benefit is $10,424.26. When paid out, these sums will be gross of taxes due. The court notes that to the date of the dissolution the entire retirement benefit in this plan accrued during the marriage. The parties put no evidence before the court as to the current election as to nature of the annuity benefit.
The defendant also holds an interest in the AIG Incentive Savings Plan. While little evidence was adduced regarding this plan, the defendant represents it to be, and the court accepts that it is a 401K plan in which there is a small part that is deferred executive compensation that is matched dollar for dollar by AIG. The present pre-tax value of the defendant's holdings is $961,773.00.
Defendant, as explained above, is employed in part by Starr International, an Irish company, also referred to as SICO in many of the exhibits. By way of deferred compensation, the defendant has 50,833.33 shares of which 6,354 will be paid in each of January 2008, 2009, and 2011, and 31,770.82 will paid to the defendant upon his retirement. These shares are currently valued at $64.97 per share. While not available to him, the defendant's shares have a current gross value of $3,302,641. At the time he receives the shares, federal income tax will be withheld (projected to be withheld by the company at 25%), as will FICA and OASDI and he will be responsible for his state and local tax.
The defendant currently is a participant in the AIG 2005/06 deferred compensation participation plan. Under the plan, the defendant was notified on September 27, 2005 that he was awarded 850 unvested performance units, which units were granted on January 1, 2005. Under the plan the units resulted in award of 12 shares of stock for each of the 850 units (or 10,200 shares total) which were contingently allocated to the defendant on December 31, 2006, payable as follows: 17.5% on May 1, 2009, 17.5% on May 1, 2010, 10% on January 1, 2015 and the balance upon retirement. If he were to cease employment with AIG for any reason, the defendant would forfeit the shares. There is nothing else that the defendant need do or perform to receive these shares of stock. The plan threshold requirement of earnings per share has been satisfied. All of the units were awarded shortly before the commencement of this action; all of the shares resulting therefrom were granted under the plan terms during the pendente lite period. All of the shares will become payable at dates after the judgment rendered herein. The current value of AIG stock, while recited elsewhere in this opinion, is of course not relevant to its future value on the payable dates, which cannot be currently ascertained.
The AIG Deferred Compensation plan was supplanted by the AIG Partners Plan commencing in 2007. Under the plan, defendant can earn performance-based restricted stock units (RSU) over a two-year performance period, the performance being based upon AIG's adjusted earnings per share. When they are earned, these stock units will vest 50% in four years and 50% in six years, both time periods measured from the inception of the performance period. The defendant was granted 3,450 performance RSUs for the 2006/2007 performance period and 7,290 performance RSUs for 2007/2008 performance period.
It is these RSUs that the defendant asserts are an expectancy not susceptible to assignment as a part of the marital estate under Conn. Gen. Stat. 46b-81. The Appellate Court has recently undertaken a comprehensive review of the development of the law in our state regarding what constitutes property under this statute. The court undertook a comprehensive survey of the law that has developed distinguishing property assignable from mere expectancies. Discussing the similar properties of an employee's stock options to his (her) pension, the court wrote:
Sec. 46b-81 Assignment of property and transfer of title.
(a) At the time of entering a decree annulling or dissolving a marriage or for legal separation pursuant to a complaint under section 46b-45, the Superior court may assign to either the husband or wife all or any part of the estate of the other. The court may pass title to real property to either party or to a third person or may order the sale of such real property, without any act by either the husband or the wife, when in the judgment of the court it is the proper mode to carry the decree into effect.
(b) A conveyance made pursuant to the decree shall vest title in the purchaser, and shall bind all persons entitled to life estates and remainder interests in the same manner as a sale ordered by the court pursuant to the provisions of section 52-500. When the decree is recorded on the land records in the town where the real property is situated, it shall effect the transfer of the title of such real property as if it were a deed of the party or parties.
(c) In fixing the nature and value of the property, if any, to be assigned, the court, after hearing the witnesses, if any, of each party, except as provided in subsection (a) of section 46b-51, shall consider the length of the marriage, the causes for the annulment, dissolution of the marriage or legal separation, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each of the parties and the opportunity of each for future acquisition of capital assets and income. The court shall also consider the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estates.
The court employed a similar analysis in Bornemann v. Bornemann, supra, 245 Conn. 517-18, in which it concluded that stock options are analogous to pension benefits in that they bestow a right upon the holder to receive a promised benefit under prescribed conditions. "[M]uch like the right of a pension beneficiary to collect a pension once the particular conditions under which the pension was offered have been satisfied — typically, the attainment of a prescribed age and the fulfillment of a required number of years of service for the employer — the holder of a stock option possesses the right to accept, under certain conditions and within a prescribed time period the employer's offer to sell its stock at a predetermined price. Should the employer attempt to withdraw the offer, the employee has a chose in action in contract against the employer . . . Conversely, [t]he defining characteristic of an expectancy is that its holder has no enforceable right to his beneficence." (Citations omitted; internal quotation marks omitted.) Id., 517. Therefore, although the stock options at issue in that case had not yet "matured" or "vested" at the time of the dissolution, the options created an enforceable right in the defendant husband, which the court held to be a presently existing, contractual interest in property that is encompassed within the broad definition of property under § 46b-81. Id., 517-18. Czarzasty v. Czarzasty, 101 Conn.App. 583, 592-3, 922 A.2d 272 (2007).
The defendant here possesses certain stock units which will not vest in the defendant until a date in the future, and, only if AIG's earnings in the applicable performance period are sufficient. If market conditions are not friendly to AIG during the applicable period, then there will be no enforceable benefit available to the defendant.
In Bender v. Bender, 258 Conn. 733, 758 A.2d 197 (2001), the court determined that the 19-year veteran firefighter husband's hope of a pension was more than a mere expectancy when he would be entitled to it if he worked 25 years, that is six years more. As such, it was available for distribution by the trial court. In analyzing this result in Bender, the Czarzasty court noted that "[t]he court concluded that the trial court had correctly classified the entire unvested pension as marital property notwithstanding the absence of any presently existing enforceable right, on the ground that his expectation in the pension plan was "sufficiently concrete, reasonable and justifiable as to constitute a presently existing property interest for equitable distribution purposes." Id., 749. In so concluding, the court seems to have recast the analysis used to determine whether an interest or benefit is property under § 46b-81 to a more probabilistic assessment untethered to the existence of a presently existing enforceable right." Czarzasty, op.cit. 593-4.
The court here, then, must determine whether it is probable that AIG's earnings will be sufficient to ensure that the conditional awards to the defendant will be realized. No evidence was presented to the court as to the probability of this other than the current downward turn in the performance of the company's stock. No evidence or expert opinion was before the court from which it can conclude that the fact that the company has performed well in the past makes it reasonably probablilistic that it will perform well in the years for which the defendant has been granted performance units. Accordingly, the court cannot, based upon the evidence presented, conclude that the defendant's conditional grants under the AIG Partners Plan (Schedule B of the defendant's financial affidavit) are property divisible under Conn. Gen. Stat. § 46b-81.
On October 17, 2007, the defendant filed notice of change of his financial circumstance, stating that on October 15, 2007 he paid the parties' 2006 Federal, State and Municipal taxes from his sole account, paying the IRS $29,500.00 and the New York State and City tax of $3,100.00.
Having carefully considered the statutory criteria and case law regarding dissolution of a marriage, alimony, assignment of property and award of attorneys fees as applied to the facts found in this matter, the court issues the following orders.
The court orders:
1. Dissolution of the marriage
2. The real estate at Stowe, Vermont is ordered sold immediately. The electronics, including the televisions, in the home shall be sold with it. The defendant is ordered to initiate the listing of the property for sale. It shall be listed for sale at the fair market value of $2,450,000. If the parties cannot agree on the sales price, it shall be sold for any offer with financing not to exceed 80%, and, if the offer is within 10% of the listing price. The defendant and plaintiff shall be required to sign all listing and sales agreements. They may in writing agree to any other listing or sales terms for the property, including conditions and price, provided the writing is signed by both of them. After payment of the mortgage, the home equity loan and customary closing expenses, each party shall receive 50% of the proceeds and be responsible for all taxes due to Vermont, the USA and any other taxing authority on their respective share.
3. The defendant shall be the sole owner of the Founders Club membership.
4. Each party shall receive 50% of the remaining escrow balance from the sale of the Cos Cob home. If the parties have not yet reported and paid taxes accrued as a part of that sale, the taxes for the same shall first be paid from the balance.
5. The parties have previously agreed to file joint federal, state and municipal tax returns for 2006 and those taxes remaining due were paid by the defendant after the hearing ended in this matter. The court declines to order any further allocation of those tax payments or the costs of the preparation of the returns.
6. The defendant shall be the sole owner of the Carver boat.
7. The plaintiff shall be the sole owner of the Subaru Tribeca.
8. The plaintiff shall be the sole owner of the contents of the Vermont home (with the exception of the electronics to be sold with the home).
9. The plaintiff shall be entitled to one half (50%) of the defendant's AIG defined benefit retirement plan valued as of the date of dissolution (as well as any gains or losses thereon), which shall be effectuated by a Qualified Domestic Relations Order (QDRO) to be drafted by plaintiff's counsel. All benefits paid into the plan on the defendant's behalf after the date of dissolution shall be the defendant's entirely. The court will retain jurisdiction over the QDRO for the purpose of its effectuation in accordance with the orders herein.
10. The plaintiff shall be entitled to 55% of the value of the defendant's AIG Incentive Savings Plan valued as of the date of these orders and any gains or losses thereto; this shall be accomplished by QDRO. The balance of the plan as well as any additional deposits thereto after the date of these orders shall belong to the defendant absolutely, free and clear of further claim from the plaintiff. The court will retain jurisdiction over the QDRO for the purpose of its effectuation in accordance with the orders herein.
11. The defendant's interest in the SICO deferred compensation plan held in his name, shall be held by him for the benefit of himself and the plaintiff in accordance with the following ordered division: as to the traunches of shares deliverable on January 1, 2008, 2009 and 2010 respectively, the defendant shall pay to the plaintiff 40% of the after-tax balance delivered to him by SICO within ten (10) days of receipt of the same in January of each of the years; as to the remaining shares deliverable upon his retirement (31,770.83) the defendant shall pay to the plaintiff 25% of the after-tax balance delivered to him by SICO within ten (10) days receipt of the same. Inasmuch as title to the same cannot be transferred by the court, the defendant shall hold title to the plaintiff's interest in this deferred compensation as a constructive trustee for her benefit. The defendant may make estimated payments for all foreseeable taxes due on the transactions and pay the net balance of the plaintiff's above ordered percentages. The defendant is entitled to the balance of the deferred compensation not ordered to the plaintiff.
12. The defendant is the sole owner of the 2,500 AIG restricted stock units (see schedule D on defendant's financial affidavit) granted him on December 11, 2006.
13. As to the AIG stock options (see schedule C on defendant's financial affidavit), the court orders that the defendant shall be solely responsible for the taxes resulting from his exercise of the options granted on December 14, 1998. As to the vested options granted from September 15, 1999 through February 10, 2003 for a total of 15,250 vested shares, the plaintiff is awarded 50% of these vested stock options. Inasmuch as title cannot be transferred by the court to these assets the defendant shall hold title to the plaintiff's interest as awarded herein as a constructive trustee for her benefit. He shall exercise the plaintiff's options in cashless transactions (to the extent permitted by AIG) in accordance with her signed, once annual written instructions, subject to law, regulation and company restrictions. The defendant may make estimated payments for all foreseeable taxes due on the transaction and pay the net balance over to the plaintiff within 45 days of her written instructions.
14. As to the performance units awarded under the 2005/2006 AIG Deferred Compensation Profit Participation Plan that are the equivalent of 10,200 shares of AIG unvested shares, which shall vest on the schedule provided in Schedule A of the defendant's financial affidavit, the court orders that the plaintiff is awarded 40% of these unvested stock options. Inasmuch as title cannot be transferred by the court to these assets, the defendant shall hold title to the plaintiff's interest as awarded herein as a constructive trustee for her benefit. He shall exercise the plaintiff's options in cashless transactions (to the extent permitted by AIG) in accordance with her signed, once annual written instructions, subject to law, regulation and company restrictions. The defendant may make estimated payments for all foreseeable taxes due on the transaction and pay the net balance over to the plaintiff within 45 days of her written instructions.
15. The defendant shall pay to the plaintiff as periodic alimony 25% of the gross of his presently earned income per month on the first of each month, and, as additional periodic alimony the defendant shall pay to the plaintiff 25% of any gross bonus received by him within 7 days of its receipt. Periodic alimony shall terminate sooner on the death of either party or the plaintiff's remarriage, civil union, or, termination by the court pursuant to Conn. Gen. Stat. § 46b-86(b), or, the defendant's retirement. If, however, an appeal is pending such that the property division orders are stayed, and, therefore the plaintiff cannot receive income from her awarded retirement assets, then retirement shall not constitute a cause for termination of alimony until the judgment is final and all property award stays have expired or been lifted by the court. All plan deferred income is excluded from these alimony calculations. As long as the defendant has an alimony obligation to the plaintiff, he shall provide her a copy of his employment W-2s by January 31 of the following year.
Of course, while the payment of alimony is expressed as a percentage of gross earned income and gross bonus, it has been awarded after consideration of its net effect, pursuant to Connecticut law.
16. The $11,000.00 per month paid by the defendant to the plaintiff pendente lite is characterized by the court as pendente lite alimony, deductible by the defendant and includable by the plaintiff in their respective income reporting to taxing authorities. The September 2007 payment having been taken from the parties' joint escrow account is not subject to this order.
If the October 2007 payment came from the escrow account the same order applies here thereto.
17. The defendant shall name the plaintiff as the beneficiary of his term life insurance policy in the face amount of $162,500 so long as he has the alimony obligations ordered herein. This order is modifiable as the alimony order may be modified by subsequent court order.
18. The plaintiff by law is entitled to health insurance through the defendant's employer by state and federal COBRA; it shall be at her cost.
19. Each party shall pay their own attorneys fees.
20. Each party shall pay their own liabilities except as otherwise provided in these orders.
21. Each party shall be the sole owner of their respective home furnishings, personal effects and jewelry presently in their physical custody. Each party shall be the sole owner of frequent flyer miles or credits in their respective names.
22. The plaintiff shall be the sole owner of her Banknorth and New Alliance accounts detailed on her financial affidavit. The defendant shall be the sole owner of his bank accounts listed at IV.B.1, 2, 3 and 4 of his trial financial affidavit.
As stated above, the account at IV.B.4 is the $25,000 distribution agreed to by the parties during the pendente lite period.
23. Within 90 days, the margin loan in the amount of $700,000.00 shall be paid from the proceeds of the Wachovia account ending in #-0109, shall be satisfied completely and the balance shall be disbursed to the parties equally. The parties shall be responsible for tax liability on their respective shares and one-half of the taxes attributable to the liquidation of any account asset for the payment of the margin loan. If an appeal is taken then the debt service on the margin loan may be paid from the account until the judgment is final.
24. The plaintiff shall indemnify and hold the defendant harmless from all claims, including the payment of attorneys fees (with the exception of fees incurred previous to the date of this order) made by her mother Rose Sklar, or, in the future the estate of Rose Sklar.