127 Conn. App. 498
Conn. App. Ct.2011Background
- Divorce final on October 14, 2005; separation agreement incorporated into dissolution judgment; Giordano (defendant) 50% owner of East Hartford properties.
- Article VI required defendant to pay plaintiff Renee Giordano $425,000 in variable installments; if defendant sells or transfers his East Hartford interests, he must pay funds due to plaintiff immediately.
- By 2007–2008, East Hartford properties faced downturn; defendant considered sale via like-kind exchange under 1031, instructed by attorney and accountant.
- June 26, 2008 sale netted ~$4.1 million; net proceeds transferred to third-party intermediary LandAmerica 1031 Exchange Services to defer taxes; plaintiff was not informed of the transactions.
- March 19, 2009 plaintiff filed postjudgment amended contempt motion seeking full payment of the property settlement; trial court later held article VI unambiguous and that defendant wilfully violated it.
- November 9, 2009 memorandum of decision affirmed contempt finding; defendant appealed claiming ambiguity and lack of wilfulness.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Article VI is ambiguous in the like-kind exchange context | Article VI is broad and unambiguous; triggers on any sale/transfer of East Hartford interests. | Article VI is ambiguous because it contemplates only transactions yielding money to defendant. | Article VI unambiguous; trigger applies to like-kind exchange. |
| Whether defendant wilfully violated Article VI | Defendant failed to pay full amount at transfer and did not seek modification; wilfulness shown. | Inability to disburse proceeds or lack of resources could excuse nonpayment. | Court did not abuse discretion; defendant wilfully violated Article VI; assets existed to satisfy obligation. |
Key Cases Cited
- In re Marcus S., 120 Conn.App. 745 (Conn. App. 2010) (two-step contempt analysis; clarity of order and wilfulness)
- Sablosky v. Sablosky, 258 Conn. 713 (Conn. 2001) (court may deny contempt when no modification sought; self-help caution)
- Remillard v. Remillard, 297 Conn. 345 (Conn. 2010) (contract ambiguity assessment; ordinary meaning governs)
- Eckert v. Eckert, 285 Conn. 687 (Conn. 2008) (contract interpretation; avoid importing ambiguity)
- Tobet v. Tobet, 119 Conn.App. 63 (Conn. App. 2010) (contract interpretation standard; ambiguity standard timing)
- Cahaly v. Benistar Property Exchange Trust Co., 268 Conn. 264 (Conn. 2004) (1031 exchange context; tax deferral mechanics)
- American International Enterprises, Inc. v. FDIC, 3 F.3d 1263 (9th Cir. 1993) (like-kind exchange principles referenced in context)