McKeon v. Lennon
138 A.3d 242
| Conn. | 2016Background
- Parties divorced in 2007 after 26-year marriage; judgment awarded the mother (McKeon) alimony and child support and split certain executive compensation (stock options, restricted stock, bonuses) as property in the decree.
- Divorce decree expressly stated stock options and restricted stock awarded or credited to the father (Lennon) prior to dissolution were divided as property and "shall not be alimony or child support," and granted the wife a percentage of future bonuses/stock for certain years.
- McKeon filed multiple postjudgment motions (2008, 2010) seeking upward modification of child support, asserting increased child needs and the father’s increased income from salary, bonuses, exercised stock options, restricted stock, and employment perquisites.
- Trial court denied McKeon’s motions (after various hearings and a remand), excluding some stock-derived amounts and perquisites from the father’s gross income largely because the decree treated certain stock benefits as property and McKeon failed to identify which perquisites qualified as in-kind compensation.
- The Appellate Court affirmed, applying this court’s Dan v. Dan alimony rationale to require more than an increase in the supporting spouse’s income to modify child support.
- The Supreme Court granted certification and (1) held Dan’s reasoning for alimony does not apply to child support, and (2) remanded for findings on whether postdissolution stock/restricted-stock income and their values should have been included in gross income; it affirmed exclusion of perquisites given plaintiff’s failure of proof and applicable deductions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Dan v. Dan alimony rule (increase in supporting spouse’s income alone is insufficient) applies to modification of child support under § 46b-86(a) | McKeon: Appellate Court misapplied Dan; child support should not follow alimony standard | Lennon: Appellate Court’s reliance on Dan was improper (dictum), but trial court correctly denied modification on facts | Court: Dan does not apply to child support; under income‑shares guidelines, an increase in supporting parent’s income alone can justify modification if it produces a substantial deviation from guidelines |
| Whether exercised stock options and vested restricted stock must be included in computing supporting parent’s gross income for child support | McKeon: Trial court and Appellate Court erred by excluding stock and restricted stock income; such items are deferred/incentive compensation and count as gross income | Lennon: Some stock benefits were divided as property in the decree and thus should not be relitigated; trial court properly excluded them | Court: Generally, exercised options and vested restricted stock are gross income (deferred/incentive compensation). But amounts traceable to stock awarded and divided as property by the dissolution decree may be excluded; remand required to determine which stock income post‑dissolution was awarded after judgment and its value |
| Whether employment perquisites must be included in gross income | McKeon: Employer contributions/perquisites should be counted as in-kind compensation | Lennon: Perquisites largely consist of employer retirement/insurance contributions and were properly handled | Court: Perquisites that qualify as in-kind compensation are included in gross income, but here plaintiff failed to identify which items met the regulation’s definition; many perquisites would be deductible when computing net income, so trial court did not abuse discretion in excluding them |
| Whether trial court abused discretion by denying modification based on its income calculations | McKeon: Court used wrong legal standard and miscalculated father’s income, so denial was erroneous | Lennon: Even if some items were included, modification would not necessarily fall outside guideline range; trial court’s factual findings entitled to deference | Court: Trial court erred to extent it excluded postdissolution stock/restricted‑stock income without findings; remand ordered for findings and reconsideration. All other aspects affirmed |
Key Cases Cited
- Dan v. Dan, 315 Conn. 1 (Conn. 2014) (increase in supporting spouse’s income alone ordinarily insufficient to modify alimony)
- Maturo v. Maturo, 296 Conn. 80 (Conn. 2010) (interpretation of child support guidelines and treatment of stock/restricted stock discussed)
- Jenkins v. Jenkins, 243 Conn. 584 (Conn. 1998) (child support based on income that would have been available had family remained intact)
- Unkelbach v. McNary, 244 Conn. 350 (Conn. 1998) (gross income definition and guidelines are income‑driven; scope of guideline interpretation)
- Dowling v. Szymczak, 309 Conn. 390 (Conn. 2013) (income shares model and guideline principles)
- Tuckman v. Tuckman, 308 Conn. 194 (Conn. 2013) (standard of review in domestic relations; questions of law reviewed plenarily)