Opinion
No. FA10 403 11 86
March 9, 2010
MEMORANDUM OF DECISION
The present dispute is a marriage dissolution action involving an antenuptial agreement. On December 15, 2009 the plaintiff, Leonard M. Tannenbaum, submitted a complaint, which he amended on January 11, 2010. The operative complaint provides as follows: The plaintiff and defendant, Elizabeth Toll Tannenbaum, were married on May 25, 1997 in Philadelphia, Pennsylvania. The plaintiff is a resident of the state of Connecticut and has resided in Connecticut for at least twelve months prior to filing the complaint. The marriage of the parties has broken down irretrievably. The parties have three young children who are issue of the marriage. Prior to their marriage, the parties entered into an antenuptial agreement dated May 14, 1997. The agreement provides that in the event of divorce: "(a) the property of each party, whether acquired before or after the execution of the agreement, is to remain the property of the party in question, and (b) each party waives alimony from the other." The agreement makes no reference to the child support or custody of the minor children.
This memorandum uses the words "prenuptial" and "antenuptial" interchangeably.
Stephen Tannenbaum born January 27, 1999; Max Tannenbaum, born August 12, 2000 and Adam Tannenbaum, born September 4, 2002.
On December 28, 2009, the plaintiff filed a motion for bifurcation (#102). On January 20, 2010, the defendant filed a memorandum in opposition. On February 4, 2010, the plaintiff filed a memorandum of law in support of his motion for bifurcation and on February 5, 2010, the defendant filed a reply.
The plaintiff moves for the court to determine the enforceability of the antenuptual agreement before determining child support for the parties' three minor children, custody of the parties' three minor children and post-majority college payments. If this court enforces the antenuptial agreement, then the court will not need to address issues of alimony or distribution of assets. The defendant claims that the antenuptial agreement is not enforceable and seeks orders of this court contrary to the provisions of the antenuptual agreement. The court must decide whether the antenuptual agreement should be bifurcated from the remainder of the issues in this marriage dissolution action.
Antenuptial Agreements
"Prenuptial agreements [entered into after October 1, 1995] are governed by Connecticut General Statutes § 46b-36a et seq., also known as the Connecticut Premarital Agreement Act. Connecticut General Statutes § 46b-36g outlines the standards for enforceability. Connecticut General Statutes § 46b-36g(a) states: [a] premarital agreement or amendment shall not be enforceable if the party against whom enforcement is sought proves that: (1) such party did not execute the agreement voluntarily; or (2) the agreement was unconscionable when it was executed or when enforcement is sought; or (3) before execution of the agreement, such party was not provided a fair and reasonable disclosure of the amount, character and value of property, financial obligations and income of the other party; or (4) such party was not afforded a reasonable opportunity to consult with independent counsel." LaCore v. LaCore, Superior Court, judicial district of Middlesex, Docket No. FA 05 4001964 (February 3, 2006, Dubay, J.).
"The Connecticut Premarital Agreement Act governs all prenuptial agreements executed on or after October 1, 1995. The intent of the legislature in drafting the Act was to codify the standards found in [ McHugh v. McHugh, 181 Conn. 482, 485, 436 A.2d 8 (1980)]. McHugh set out three conditions for the enforceability of prenuptial agreements . . . (1) the contract was validly entered into; (2) its terms do not violate statute or public policy; and (3) the circumstances of the parties at the time the marriage is dissolved are not so beyond the contemplation of the parties at the time the contract was entered into as to cause its enforcement to work injustice." (Citation omitted; internal quotation marks omitted.) LaCore v. LaCore, supra, Superior Court, Docket No. FA 05 4001964.
"A prenuptial agreement executed after October 1, 1995 should be found valid and enforceable if it satisfies the above-mentioned statutory standards." LaCore v. LaCore, supra, Superior Court, Docket No. FA 05 4001964. In the present matter, the antenuptial agreement was executed on May 14, 1997; therefore, it is controlled by the Uniform Prenuptial Agreement Act, General Statutes Section 46b-36g.
Bifurcation
The plaintiff asks this court to bifurcate the antenuptial agreement from the remainder of the issues in the marriage dissolution matter. Bifurcation is a judge's ability to divide a trial into two parts so as to render a judgment on a set of legal issues without looking at all aspects of the case. Winer-Sorensen v. Sorensen, Superior Court, judicial district of Waterbury, Docket No. FA 08 4017663 (April 21, 2009, Cutsumpas, J.T.R.) [ 47 Conn. L. Rptr. 619]. "Bifurcation may be appropriate in cases in which litigation of one issue may obviate the need to litigate another issue." Barry v. Quality Steel Products, Inc., 263 Conn. 424, 449, 820 A.2d 258 (2003).
"Whether a dissolution action can be bifurcated so that the validity of a premarital agreement can be decided prior to the final hearing on the dissolution of the marriage is not a new issue before the court. Unfortunately, the few Superior Court cases that have addressed the issue refer to agreements made by the parties to bifurcate, or provide no analysis or explanation regarding the court's decision to bifurcate the trial. See [ LaCore v. LaCore, supra, Superior Court, Docket No. FA 05 4001964] (matter bifurcated to accommodate counsel); Krawczynski v. Krawczynski, Superior Court, judicial district of Waterbury, Docket No. FA 0100143 (February 24, 1993, Harrigan, J.) (bifurcated by agreement of the parties); Winchester v. McCue, Superior Court, judicial district of New Haven, Docket No. FA 02 0471185 (February 26, 2004, Gilardi, J.) ( 36 Conn. L. Rptr. 717) (no analysis provided by court); Oliver v. Oliver, Superior Court, judicial district of Hartford, Docket No. FA 95 551531 (December 30, 1997, Shortall, J.) (same)." Winer-Sorensen v. Sorensen, supra, Superior Court, Docket No. FA 08 4017663.
"Pursuant to General Statutes § 52-205 and Practice Book § 15-1, a trial court has the discretion to determine the order in which issues shall be tried. `The bifurcation of a trial [proceeding] lies solely within the discretion of the trial court . . . [and] appellate review is limited to a determination of whether this discretion has been abused.' (Citations omitted; internal quotation marks omitted.) Saczynski v. Saczynski, 109 Conn.App. 426, 428, 951 A.2d 670 (2008). `Discretion means a legal discretion, to be exercised in conformity with the spirit of the law and in a manner to subserve and not to impede or defeat the ends of substantial justice . . . It goes without saying that the term abuse of discretion does not imply a bad motive or wrong purpose but merely means that the ruling appears to have been made on untenable grounds.' (Internal quotation marks omitted.) O'Shea v. Mignone, 50 Conn.App. 577, 583, 719 A.2d 1176, cert. denied, 247 Conn. 941, 723 A.2d 319 (1998)." Winer-Sorensen v. Sorensen, supra, Superior Court, Docket No. FA 08 4017663. "The interests served by bifurcated trials are convenience, negation of prejudice and judicial efficiency." Reichhold v. Hartford Accident Indemnity Co., 243 Conn. 401, 423, 703 A.2d 1132 (1997), on appeal after remand, 252 Conn. 774, 750 A.2d 1051 (2000).
General Statutes § 52-205 provides: "In all cases, whether entered upon the docket as jury cases or court cases, the court may order that one or more of the issues joined be tried before the others."
Practice Book § 15-1 provides in relevant part: "Order of [t]rial [i]n all cases, whether entered upon the docket as jury cases or court cases, the judicial authority may order that one or more of the issues joined be tried before the others."
The plaintiff argues that the antenuptial agreement should be bifurcated from the remainder of the issues in this marriage dissolution action because "the antenuptial agreement will serve the interests of justice, promote judicial efficiency and, in the event that said premarital agreement is deemed enforceable, save the parties a considerable expenditure of financial and emotional resources." He further argues that if the court does not bifurcate the antenuptial agreement prior to trial, both parties will need to conduct in-depth discovery and the court will need to calculate a number of somewhat unknown factors because both parties have substantial and complex financial assets. He explains that the defendant is heiress to a large family fortune, and "stands to inherit from a family whose wealth is between two hundred fifty and three hundred million dollars." The plaintiff further explains that he has a net worth in excess of fifteen million dollars, much of that in privately-held entities. He also owns real estate, deferred assets, and other assets that will have to be considered before the court can make a determination as to equitable distribution under General Statutes § 46b-81.
The plaintiff cites to Reichhold Chemicals v. Hartford Accident Indemnity Co., 243 Conn. 401, 423 (1997), on appeal after remand, 252 Conn. 774 (2000) and Winer-Sorensen v. Sorensen, supra, Superior Court, Docket No. FA 08 4017663.
According to the plaintiff, "the [d]efendant Elizabeth Toll Tannenbaum's financial statement appended to the [a]ntenuptial [a]greement indicates that she is `one of four daughters of Bruce E. and Robbi Toll who together have a personal net worth of approximately $250-$300 million. Elizabeth expects that she will receive in the future very substantial inheritances and gifts . . . from her parents. The [d]efendant's financial statement goes on to list a trust of [o]ne [m]illion [d]ollars ($1,000,000) from which the [d]efendant is entitled to the income; an insurance trust with a second-to-die policy in the face amount of [t]wenty [m]illion [d]ollars ($20,000,000) of which the [d]efendant is a beneficiary and from which [d]efendant is entitled to income and, in the trustee's discretion, principal; and a second insurance trust with a second-to-die policy in the face amount of [s]eventeen [m]illion [d]ollars ($17,500,000) of which [d]efendant is a beneficiary and from which [d]efendant is entitled to income and, in the trustee's discretion, principal."
General Statutes § 46b-81 provides:
(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 affect 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.
In response, the defendant claims that bifurcation would not obviate the need to litigate certain matters twice. The defendant explains that bifurcating the issue of enforceability via a pendente lite hearing on issues that have a high likelihood of being adjudicated a second time at trial would be a great waste of the parties' and the court's resources. She also argues that significant factual issues in this case involve the following factors: "(a) evidence relevant to enforceability of the agreement; (b) evidence relevant to alimony and child support; (c) evidence relevant to custody of three minor children and (d) evidence relevant to the equitable distribution of assets."
The defendant argues that the antenuptial agreement is not fair, equitable or enforceable because the plaintiff has extensive assets and that the plaintiff's financial circumstances have changed significantly and dramatically since the parties entered into the antenuptial agreement. At the time of the agreement, the plaintiff had assets worth $352,000, whereas currently the plaintiff has a net worth of approximately fifteen million dollars. The defendant claims that this substantial change in the plaintiff's financial circumstances was outside of the contemplation of the parties at the time that the agreement was executed, and much of the plaintiff's financial success was aided by financial support from the defendant's father.
Factors Regarding Conscionability of Enforcement of the Agreement
Factors that the court must consider when determining conscionability of enforcement of the agreement include: (1) whether the change in financial circumstances were contemplated by the parties at the time that they entered into the agreement and (2) which party initiated the agreement.
The plaintiff also claims that the defendant's anticipation of a substantial future inheritance is a factor that this court should consider. This argument is not persuasive, and is presently not relevant in considering the motion to bifurcate. Our Appellate Court has found that the court should not consider undistributed trust assets as income when determining the parties' alimony obligations, or lack thereof, to one another. Taylor v. Taylor, 117 Conn.App. 229, 978 A.2d 538 (2009) (holding that the trial court could not reduce alimony based on finding that supplementary spendthrift trust of which ex-wife was a beneficiary earned enough to provide for ex-wife's support). This court will not consider the defendant's anticipated inheritance as a factor in assessing whether the agreement was conscionable.
A. Change in Circumstances Within the Contemplation of the Parties
"[A]n antenuptial agreement will not be enforced where the circumstances of the parties at the time of the dissolution are so far beyond the contemplation of the parties at the time the agreement was made as to make enforcement of the agreement work an injustice . . . Thus, where a marriage is dissolved not because it has broken down irretrievably, but because of the fault of one of the parties, an antenuptial waiver of rights executed by the innocent party may not be enforceable, depending upon the circumstances of the particular case and the language of the agreement . . . Likewise, where the economic status of parties has changed dramatically between the date of the agreement and the dissolution, literal enforcement of the agreement may work injustice. Absent such unusual circumstances, however, antenuptial agreements freely and fairly entered into will be honored and enforced by the courts as written." (Citations omitted.) McHugh v. McHugh, supra, 181 Conn. 489.
In Winchester v. McCue, Superior Court, judicial district of New Haven, Docket No. FA 02 0471185 (February 26, 2004, Gilardi, J.) ( 36 Conn. L. Rptr. 717), aff'd, 91 Conn.App. 721, 882 A.2d 143 (2005), the court applied the same analysis as our Supreme Court in McHugh in determining the way in which to address the "dramatic change in financial circumstances." The court held that the prenuptial agreement was valid and that there would be no injustice against the plaintiff in enforcing the terms of the prenuptial agreement because the changes in the financial circumstances of the parties were not so extreme as to be outside the contemplation of the parties. The trial court explained that "[a] review of recent superior court decisions reveals that the court will generally find that a significant increase in one party's financial assets is sufficient to invalidate a prenuptial agreement on the ground that the parties' circumstances are beyond what they contemplated when they entered into the agreement." (Emphasis added.) Id.
The present case differs from Winchester in that the discrepancy between the parties' assets in that case was only 25 percent, whereas here there is a much larger discrepancy. While the plaintiff has substantial assets, the defendant is a stay-at-home mother and has no income. This court will enforce the antenuptial agreement only if it finds that the change in the plaintiff's financial circumstances was within the parties' contemplation when they entered into the antenuptial agreement.
B. Initiating Party
The plaintiff claims that the agreement should be enforced because the defendant initiated the antenuptial agreement, and the defendant's attorney drafted the agreement. While not dispositive, the McHugh court stated that "[o]ther factors that bear upon the validity of such contracts include which party drafted the agreement, by counsel or otherwise, and whether the parties were represented by counsel." McHugh v. McHugh, supra, 181 Conn. 487. Here, the court notes that the defendant initiated the antenuptial agreement and will take this factor into consideration when assessing whether it would be conscionable to enforce the antenuptial agreement.
Finding of Fault
In support of his argument that the prenuptial agreement should be bifurcated, the plaintiff notes that General Statutes §§ 46b-82, 46b-81, the alimony statute and property division statute, respectively, require that fault for the breakdown of the marriage be determined. The plaintiff claims that if the prenuptial agreement is upheld in a bifurcated hearing, the parties will not need to argue the issue of fault, because those two factors will be taken out of the equation. The plaintiff further claims that "[a] trial of this matter where alimony and property division are left to the court's discretion will likely be complex and lengthy. In addition discovery will be a significant undertaking and numerous experts will likely be retained."
General Statutes § 46b-82 provides: "In determining whether alimony shall be awarded, and the duration and amount of the award, the court shall hear the witness, 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 . . . dissolution of the marriage . . . the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate and needs of each of the parties and the award, if any, which the court may make pursuant to § 46b-81 . . ."
General Statutes § 46b-81(c) provides: "In fixing the nature and value of the property, if any, to he assigned, the court . . . shall consider the length of the marriage, the causes for the . . . dissolution . . . 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 to the acquisition, preservation or appreciation in value of their respective estates."
Although some Connecticut cases do use the word "fault" as a relevant factor with regard to these sections; see e.g., Kirby v. Kirby, Superior Court, judicial district of Hartford, Docket No. FA 08 4040877 (January 19, 2010, Fischer, J.); the majority of Connecticut courts use the plain language of the sections, "causes for the . . . dissolution" as opposed to "fault." See e.g., Desai v. Desai, Superior Court, 119 Conn.App. 224, 238, 987 A.2d 362 (2010); Gamin v. Gamin, Superior Court, judicial district of New Haven, Docket No. FA 94 0363542 (November 12, 2009, Burke, J.).
This court agrees with the plaintiff's argument that if the antenuptial agreement is enforced, then the parties will not need to present evidence as to the cause of the dissolution of the marriage for purposes of alimony and property distribution. Nevertheless, even if the parties are not required to present such evidence, they will still need to present evidence as to the full extent of their assets for child support and custody purposes. General Statutes § 46b-84(d) provides: "In determining whether a child is in need of maintenance and, if in need, the respective abilities of the parents to provide such maintenance and the amount thereof, the court shall consider the age, health, station, occupation, earning capacity, amount and sources of income, estate, vocational skills and employability of each of the parents, and the age, health, station, occupation, educational status and expectation, amount and sources of income, vocational skills, employability, estate and needs of the child." (Emphasis added.); see also Kjos v. Kjos, Superior Court, judicial district of Middlesex, Docket No. FA 04 0104260 (December 14, 2009, Vitale, J.) ("The child support guidelines require the court to determine each party's actual current gross and net income, and using those figures, determine the presumptive current support amount."). In the present case, the parties will still need to present evidence and testimony as to their respective financial abilities so that the court may determine each party's child support obligation.
Connecticut Courts' Findings Regarding Bifurcation in Similar Family Matters
Two recent Superior Court cases, Winer-Sorensen v. Sorensen, supra, Superior Court, Docket No. FA 08 4017663, and Mitchell v. Mitchell, Superior Court, judicial district of Waterbury, Docket No. FA 08 4017568 (May 22, 2009, Cutsumpas, J.T.R.) [ 47 Conn. L. Rptr. 865], addressed the issue of whether the validity of a premarital agreement should be determined prior to the final hearing on the dissolution of the marriage or as part of the final hearing. In Winer-Sorensen, the plaintiff moved to bifurcate the prenuptial agreement from the rest of the judicial decisions, on grounds of judicial convenience and efficiency, and because she did not want to be "forced to participate in an expensive and emotionally and psychologically exhausting trial . . ." Id. The defendant argued against bifurcation because he was the disadvantaged party and could not afford two hearings. The court found that "bifurcation of the proceedings would be appropriate. A determination of the validity of the premarital agreement at a time prior to the final dissolution would best serve the interests of judicial convenience and efficiency. A ruling in favor of bifurcation does not prejudice the defendant to the same extent that an opposite ruling would prejudice the plaintiff. [The] court [was] not persuaded by the defendant's alleged prejudice of having to prepare for two trials, and the costs associated therein. If the court were to rule against the plaintiff on this motion, the defendant would still have to prepare for a trial in which he would have to challenge the validity of the agreement, as well as prepare to contest his claims of alimony, counsel fees and equitable distribution of property. In the alternative, if the agreement [were] deemed unenforceable, the same level of preparation would still be required as in one full hearing on all of the issues."
In Winer-Sorensen and Mitchell the court did not provide a detailed analysis of its rationale in granting or denying the motion to bifurcate. In both cases, the court did consider the following factors: "(1) whether the issues are significantly different from one another; (2) whether the issues are to be tried before a jury or to the court; (3) whether the posture of discovery on the issues favors a single trial or bifurcation; (4) whether the documentary and testimonial evidence on the issues overlap and; (5) whether the party opposing bifurcation will be prejudiced if it is granted." (Citations omitted; internal quotation marks omitted.) Winer-Sorensen v. Sorensen, supra, Superior Court, Docket No. FA 08 4017663; see also Mitchell v. Mitchell, supra, Superior Court, Docket No. FA 08 4017568. In the present case, this court has considered the above five factors in denying the plaintiff's motion to bifurcate. At the time of trial, the parties will still need to present evidence concerning the parties' financial situations so that the court may decide issues of custody and child support. Denying the motion to bifurcate does not obviate the need for both parties to present evidence and testimony about their respective financial circumstances. Rather, the only effort that could possibly be saved if the court were to bifurcate the antenuptial agreement would be the party's need to argue the cause of the dissolution. While this court is always concerned about judicial economy, there are fundamental rights that must be protected by a fair airing of the claims of both parties. While the expense of litigation is often a factor that courts consider, this problem is not a controlling factor in the present case.
The court denies the plaintiff's motion to bifurcate.