200 Conn.App. 688
Conn. App. Ct.2020Background
- Parties executed a separation agreement incorporated into their 2007 dissolution judgment; Article 4 defined “pre-tax income from employment,” expressly excluding Subchapter S (K-1) distributions in ¶4.1 but ¶4.2 used a business valuation and referred to “reasonable and appropriate compensation” to fix a stipulated pre-tax income of $192,000 ($175,000 salary + $17,000 benefits).
- Plaintiff (William Marshall) paid varying alimony through 2008, reduced/ceased payments in 2009–2011, and filed a postjudgment motion to modify alimony in August 2011; defendant (Kimberly Marshall) filed a contempt motion for unpaid alimony.
- Trial Court (Klatt, J.) treated ¶4.4 as self-executing, calculated alimony from plaintiff’s W-2, granted plaintiff’s modification (reduced to $1/yr retroactive Aug 31, 2011), and found an arrearage; defendant appealed.
- Appellate Court in Marshall I (151 Conn. App. 638) held the agreement ambiguous as to inclusion and extent of K-1 income in “pre-tax income,” reversed the grant of modification and the arrearage calculation, and remanded for fact-finding as to the parties’ intent and arrearage.
- On remand (Judge Trial Referee Adelman) the court bifurcated the hearing, found the parties intended some K-1 to be included via a “reasonable compensation” methodology, adopted expert calculations using that method for 2008–2011, recalculated arrears, granted modification to zero effective Sept 1, 2011 (within the motion-service window), and left a small net arrearage (~$2,817); defendant appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of remand — could trial court use reasonable compensation methodology? | Trial court may determine intent and method; reasonable compensation is relevant and within remand scope. | Remand required only to decide whether K-1s are included; court exceeded mandate by adopting reasonable compensation. | Trial court acted within remand scope; using reasonable compensation to effectuate the agreement did not alter its terms. |
| Law of the case — did Marshall I fix that pre-tax income (actual W-2+K-1) must be used? | Marshall I left ambiguity and remanded, so no binding single formula constrained the remand court. | Appellate decision established pre-tax income basis as law of the case; remand court violated it by using reasonable compensation. | Marshall I did not establish the trial court’s prior calculations as law of the case; remand court complied with mandate. |
| New argument on remand — may appellee advance reasonable compensation theory not previously argued? | As appellee, plaintiff not barred from presenting the method on remand; appellate posture permits appellee to respond. | Plaintiff failed to assert reasonable compensation earlier and should be precluded from changing theories on remand. | Plaintiff (as appellee) was permitted to advance the theory; claim of forfeiture rejected. |
| Method for calculating income — reasonable compensation vs. actual receipts (W-2 + K-1 + benefits) | Reasonable compensation methodology was adopted by parties in ¶4.2 valuation and is appropriate to determine base salary going forward. | Agreement did not provide for reasonable compensation as the ongoing method; court wrongly substituted methodology. | Trial court’s factual finding that parties adopted reasonable compensation was supported by evidence and not clearly erroneous. |
| Retroactivity — did court improperly modify alimony retroactively for ~4 years? | Court only interpreted agreement for prior years (ministerial calculation) and modified alimony retroactive only to date after service of motion (Sept 1, 2011), which §46b-86 permits. | Recalculating and reducing past obligations amounted to impermissible retroactive modification. | Recalculation to determine historical arrears was proper under the remand; the modification to zero was only retroactive to Sept 1, 2011 (post-service) and thus permissible. |
Key Cases Cited
- Hurley v. Heart Physicians, P.C., 298 Conn. 371 (2010) (scope of remand: trial court must follow mandate but may consider matters relevant to remand issues)
- Marshall v. Marshall, 151 Conn. App. 638 (2014) (prior appellate decision finding ambiguity about K-1 inclusion and remanding to determine parties’ intent and arrearage)
- Harris v. Bradley Mem. Hosp. & Health Ctr., 306 Conn. 304 (2012) (appellee generally not deemed to have forfeited claims that could have been raised by appellant)
- O’Brien v. O’Brien, 161 Conn. App. 575 (2015) (failure to raise a claim on prior appeal can waive it on remand; distinguished here because plaintiff was appellee)
- Lynch v. Lynch, 153 Conn. App. 208 (2014) (retroactive modification of alimony is generally impermissible except for periods after service of a pending modification motion)