STEPHEN BIRKHOLD v. SUSAN BIRKHOLD
(SC 20593)
Supreme Court of Connecticut
Rоbinson, C. J., and D‘Auria, Mullins, Ecker and Keller, Js.
Argued February 16—officially released June 28, 2022
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Syllabus
The plaintiff, whose marriage to the defendant had been dissolved, appealed from the trial court‘s postdissolution decision to grant the plaintiff‘s motion for modification of alimony and the defendant‘s motion for contempt, and to award the defendant past due alimony and attorney‘s fees. When the parties’ marriage was dissolved in 2009, the plaintiff was employed as the chief executive officer of a major corporation and was paid a base annual salary and bonuses. The parties’ separation agreement, which had been incorporated into the judgment of dissolution, required the plaintiff to pay the defendant alimony in the amount of 30 percent of his “gross annual base income from employment” and 25 percent of his gross cash bonus. The plaintiff subsequently left that corporation and, in 2015, began working as a commercial real estate broker for C Co. Under C Co.‘s compensation plan, the plaintiff received annual draws on future commissions, initially in the amount of $35,000 a year, and, if he did not earn commissions sufficient to cover the draws, he was obligated to pay the difference back to C Co. The plaintiff elected to have the draws depоsited into a bank account in the name of a limited liability company, S Co., that he had created in 2014. The plaintiff also deposited into that account money he earned in connection with certain consulting work he performed on the side. The plaintiff notified the defendant when his employment at C Co. began, and she initially agreed to accept monthly alimony in the amount of $875, or 30 percent of the $35,000 annual draw. The plaintiff, however, continued to pay her only $875 per month, even though his annual draw rate increased significantly between 2015 and 2019. In response, the defendant filed her motion for contempt and sought payment of accrued, unpaid alimony that purportedly was owed under the separation agreement. The plaintiff, on the other hand, sought to modify his alimony obligation due to a substantial change in circumstances relating to the nature of his employment with C Co. After a hearing, the trial court granted both motions and awarded the defendant past due alimony and attorney‘s fees. With respect to the plaintiff‘s motion to modify his alimony obligation, the court replaced the requirement under the separation agreement that he pay the defendant 30 percent of his gross annual base income from employment with a fixed alimony obligation of $6500 pеr month. The court also found the plaintiff in contempt for wilfully violating his alimony obligation under the separation agreement. On appeal from the trial court‘s decision, held:
1. The plaintiff could not prevail on his claim that the trial court incorrectly had interpreted the separation agreement and found that the money the plaintiff received from C Co. in the form of draws constituted income that was subject to alimony: the agreement‘s clear and unambiguous definition of “gross annual base income from employment” was without limitation and included income the plaintiff actually received as compensation for, or by reason of, past, present or future employment, from any and all sources, and nothing in the agreement indicated that it contemplated the payment of alimony derived from traditional salary income but not from commissions or consulting fees; moreover, although the term “income” was not defined in the separation agreement, and, therefore, that term was ambiguous, the trial court‘s determination that the plaintiff‘s draws from C Co. constituted income was not clearly erroneous, as the draws were clearly from his employment as a real estate broker, they were listed as payroll when deposited into S Co.‘s bank account, the plaintiff reported the draws as gross income on his personal tax returns, C Co. referred to the plaintiff as an employee and to his income as earnings on its pay statements, the plaintiff would have to pay back unearned draws if his employment relationship with C Co., he presented no evidence about how he earned commissions or about whether C Co. ever recovered, demanded or threatened to recover unearned draws from him such that the draws should be treated as loans rather than income, and he treated the money he received from C Co. as income in every relevant way, except to pay alimony to the defendant; furthermore, the trial court‘s skepticism toward the plaintiff‘s calculation of his alimony obligation under the separation agreement after he started working for C Co. was well founded, as the defendant failed to established how he earned his commissions, how much of them were applied to his draws, and why he did not pay alimony on commissions he earned.
2. The trial court correctly interpreted the separation agreement and treated the money the plaintiff earned from C Co. and from other entities as a consultant, which ultimately was deposited into S Co.‘s bank account, as the plaintiff‘s personal incomе that was subject to alimony: the trial court‘s factual findings that the plaintiff treated the money he earned at C Co. and for his consulting work as his own income and that such earnings constituted income subject to alimony were not clearly erroneous because, although the plaintiff chose to have his draws from C Co. and the money he earned from consulting deposited into S Co.‘s bank account, he could not structure the receipt of his income and use the corporate form to avoid his alimony obligation; moreover, many of S Co.‘s claimed business deductions appeared to be personal expenses, S Co.‘s actual business activities appeared to consist only of taking money received by the plaintiff and finding ways to claim deductions and expenses to shelter or hide it from the defendant, and nothing in the separation agreement addressed business related expenses; furthermore, although it may be advantageous for tax purposes to set up a limited liability company, such as S Co., that fact had no bearing on the determination of whether income is properly subject to alimony.
3. The trial court did not abuse its discretion in modifying the plaintiff‘s alimony obligation by requiring the plaintiff to pay to the defendant a fixed amount of $6500 per month: contrary to the plaintiff‘s claim that the trial court considered only his past gross income and improperly modified his alimony obligation on the basis of an earning capacity not supported by the record, the court considered all of the statutory (
4. The trial cоurt did not abuse its discretion in finding the plaintiff in contempt for breaching his alimony obligation to the defendant: it was sufficiently clear from the terms of the separation agreement that the plaintiff was required to pay alimony on commissions he earned and on other consulting income, he did not pay such alimony, and it was untenable to conclude that he did not wilfully fail to fully comply with his obligation under the separation agreement to pay alimony on the basis of his gross annual base income from employment, in whatever form received and from any and all sources, including commissions and consulting income paid to him or deposited into S Co.‘s bank account; moreover, it was abundantly clear that this failure to comply did not involve a good faith dispute or legitimate misunderstanding, as the plaintiff engaged in self-help by unilaterally reducing his alimony obligation when he first began his employment with C Co., and he sought court approval to modify that obligation only after the defendant moved for contempt; furthermore, the fact that the plaintiff informed the defendant, when the plaintiff started working for C Co., that he was adjusting his alimony payments due to the complicated nature of the payment structure at C Co. should have alerted him to the need to seek the advice of the court concerning the future calculation of his alimony obligation, and the plaintiff‘s concession that he did not pay alimony on his commissions and income from his consulting work undermined any contention that any ambiguity concerning his alimony obligation entitled him to resort to self-help rather than seeking the advice of the court.
Procedural History
Action for the dissolution of a marriage, and for other relief, brought to the Superior Court in the judicial district of Fairfield, where the court, Pinkus, J., rendered judgment dissolving the marriage and granting certain other relief in accordance with the parties’ separation agreement; thereafter, the court, Wenzel, J., granted the defendant‘s motion for contempt and granted in part the plaintiff‘s motion for modification, and the plaintiff appealed. Affirmed.
Charles D. Ray, with whom, on the brief, were Brittany A. Killian and Angela M. Healey, for the appellant (plaintiff).
Alexander Copp, with whom was Rachel A. Pencu, for the appellee (defendant).
Opinion
The record reveals the following procedural history and facts found by the trial
At the time of dissolution, the plaintiff was the chief executive officer of a major corporation. He was paid an annual salary and a bonus, and received a W-2 form for tax purposes. Although the plaintiff changed jobs after the divorce, he remained a highly compensated corporate executive, earning more than $2 million a year in 2013 and 2014. Pursuant to the parties’ agree-ment, the defendant received 30 percent of his earnings, all of which was paid as base income during those years. The plaintiff was then unemployed for almost one year.
In 2015, the plaintiff informed the defendant that he had begun working for Cushman & Wakefield as a commercial real estate broker. He would receive annual draws on future commissions, initially in the amount of $35,000 a year, which he claimed he did not earn until he realized sales that resulted in commissions. The plaintiff stated that the purpose of the draw was to provide him with medical insurance. If the plaintiff did not earn commissions sufficient to cover the draw, his employment agreement obligated him to pay the difference back to Cushman & Wakefield. Two weeks after beginning at Cushman & Wakefield, the plaintiff offered to pay the defendant $875 a month (30 percent of the $35,000 draw) in alimony as long as the defendant agreed that she would pay him back if he did not earn his draw. The defendant agreed to accept the $875 a month alimony payment because she was “in a very difficult financial predicament [at that time], and even that small amount [would] aid in paying utilities.”
In subsequent years, the plaintiff‘s annual draw rate increased. The plaintiff‘s total compensation from Cushman & Wakefield was $175,900 in 2016, $315,777 in 2017, $216,105 in 2018, and $138,534 in 2019. The plaintiff also received other payments as a business consultant to other entities during this time, totaling $630,930. Despite the increase in the draw rate and his other consulting income, the plaintiff continued to pay the defendant only $875 a month in alimony.
In 2017, the defendant filed a postjudgment motion for contempt and, later, in 2018, an amended motion for contempt for the plaintiff‘s failure to pay alimony consistent with the separation agreement. In addition to a finding of contempt, the defendant sought an order compelling the plaintiff to pay her the accrued unpaid
Following a multiday evidentiary hearing, the trial court issued a memorandum of decision and awarded the defendant past due alimony as of October 1, 2019, in the amount of $249,570 to be paid in $3500 monthly installments,2 and attorney‘s fees and costs in the amount of $80,000, to be paid in $4000 monthly installments. The trial court also granted the plaintiff‘s motion to modify his alimony obligation by eliminating the 30 percent of gross аnnual base income from employment formula and replacing it with a fixed monthly alimony obligation of $6500 per month.3 The trial court also found the plaintiff in contempt for wilfully violating the “clear and unambiguous” separation agreement.
The plaintiff appealed to the Appellate Court, and the appeal was transferred to this court pursuant to
I
On appeal, the plaintiff claims that the trial court premised its decision awarding the defendant past due alimony on an incorrect reading of the separation agreement and a clearly erroneous finding that
The interpretation of a separation agreement “incorporated into a dissolution decree is guided by the general principles governing the construction of contracts.” (Internal quotation marks omitted.) Eckert v. Eckert, 285 Conn. 687, 692, 941 A.2d 301 (2008). When the language of a contract is clear and unambiguous, the contract “must be given effect according to its terms, and the determination of the parties’ intent is a question of law.” (Internal quotation marks omitted.) Nation-Bailey v. Bailey, 316 Conn. 182, 192, 112 A.3d 144 (2015). “When the language of a contract is ambiguous, the determination of the parties’ intent is a question of fact.” (Internal quotation marks omitted.) Id.
“When construing a contract, we seek to determine the intent of the parties from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction. . . . [T]he intent of the parties is to be ascertained by a fair and reasonable construction of the written words and . . . the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the contract.” (Emphasis in original; internal quotation marks omit-ted.) Isham v. Isham, 292 Conn. 170, 180, 972 A.2d 228 (2009).
We agree with the trial court‘s conclusion that the clear and unambiguous definition of gross annual base income from employment included income from self-employment or as an independent contractor. The definition of gross annual base income from employment provided by the separation agreement “is expressly stated to be without limitation” and includes income “actually received” by the plaintiff from employment as “compensation for or by reason of past, present or future employment, in whatever form received,” and from “any and all sources derived.” Some examples of gross annual base income from employment, like consulting fees, commissions, and director‘s fees, “might be reported as either W-2 wages or 1099s.” No language in the separation agreement “suggests the form of reporting income should control which income is recognized for the purpose of alimony computation,” and, therefore, the trial court correctly rejected the argument that the separation agreement contemplated the plaintiff paying alimony derived only from traditional W-2 salary.
Although the trial court never said so, the term “income” is ambiguous; its meaning in any particular cаse will depend on the surrounding context.5 The separation agreement defines “gross annual base income from employment” but does not define “income.” We previously have observed that “income” is defined broadly, particularly in family cases. See Unkelbach v. McNary, 244 Conn. 350, 360-61, 710 A.2d 717 (1998). This is consistent with our approach of “includ[ing] in income items that increase the amount of resources
For example, Black‘s Law Dictionary defines “income” as “[t]he money or other form of payment that one receives, usu[ally] periodically, from employment, business, investments, royalties, gifts, and the like.” Black‘s Law Dictionary (11th Ed. 2019) p. 912. Another dictionary defines “income” as “something that comes in as an increment or addition usu[ally] by chance . . . a gain or recurrent benefit that is usu[ally] measured in money and for a given period of time, derives from capital, labor, or a combination of both, includes gains from transactions in capital assets, but excludes unrealized advances in value: commercial revenue оr receipts of any kind except receipts or returns of capital . . . .” Webster‘s Third New International Dictionary (2002) p. 1143; see also Gay v. Gay, 70 Conn. App. 772, 778, 800, A.2d 1231 (2002) (quoting definition in Webster‘s Third New International Dictionary to determine meaning of “income,” as used in
Despite the generally expansive meaning of the term, not every receipt of funds will be considered income. Perhaps most prominently, a loan is “not an [asset] but a liability” and cannot properly be considered income to determine alimony. Schmidt v. Schmidt, 180 Conn. 184, 188, 429 A.2d 470 (1980).
Because of the broad but not limitless definition of income, appellate courts often hold that, when a separation agreement provides no definition of income, the term is ambiguous. See, e.g., Marcus v. Marcus, 175 Conn. 138, 141, 394 A.2d 727 (1978) (term “income” is ambiguous when undefined in separation agreement); Baldwin v. Baldwin, 19 Conn. App. 420, 422, 562 A.2d 581 (1989) (same). It is, therefore, unsurprising that, historically, the question of “[w]hether money should be characterized as income or a loan is a question of fact for the trial court.”6 Keller v. Keller, 167 Conn. App. 138, 152, 142 A.3d 1197, cert. denied, 323 Conn. 922, 150 A.3d 1151 (2016); see also Zahringer v. Zahringer, 262 Conn. 360, 369-71, 815 A.2d 75 (2003). Although
Because the parties’ separation agreement in the present case does not define the term “income,” we cоnclude that it is susceptible to more than one reasonable interpretation and is therefore ambiguous. This conclusion is reinforced, rather than undermined, by the text of the separation agreement, which provides that gross annual base income from employment includes “income actually received” from any and all sources, and encompasses income from wages, salary, consulting fees, commissions, director‘s fees, “and compensation for or by reason of past, present or future employment, in whatever form received.” Accordingly, we apply the clearly erroneous standard of review to the trial court‘s factual determination that the plaintiff‘s draws from Cushman & Wakefield were income. A finding of fact is clearly erroneous when no evidence in the record supports it “or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” (Internal quotation marks omitted.) Remillard v. Remillard, 297 Conn. 345, 356, 999 A.2d 713 (2010).
There is ample evidence in the record that supports the trial court‘s finding that the money received by the plaintiff from Cushman & Wakefield in the form of a draw was includable as gross annual base income from employment. The trial court found that the moneys from Cushman & Wakefield “were clearly from employment,” regardless of “whether they were currently earned or still subject to repayment.” The draws were paid for the plaintiff‘s services as a commercial real estate broker at Cushman & Wakefield. He received semimonthly deposits, listed as “C & W Inc. 1099 Payroll,” to his LLC bank account. The plaintiff reported the draws as “gross income” on his personal tax returns. Cushman & Wakefield referred to the plaintiff as an “employee,” and to his income as “earnings,” on a 2019 pay statement, and noted that he would have to pay back unearned draws “[i]n the event [his] employment or relationship” with Cushman & Wakefield ended. (Emphasis added.)
Although the plaintiff presented evidence in the form of draw agreements and promissory notes with Cushman & Wakefield, and testified that the draws were loans, he presented no evidence about how he actually earned his commissions and no evidence that Cushman & Wakefield, in fact, “ever did recover, demand or even threaten to recover unearned draws.” Even when the plaintiff did
Consistent with the parties’ intent at the time they signed the separation agreement, as evidenced by their having provided a very broad definition of gross annual base income from employment, the defendant clearly expected some form of alimony so long as the plaintiff was employed. For the first four months after the divorce, the separation agreement required the plaintiff to pay $11,750 a month in alimony. After those four months, the separation agreement required the plaintiff to pay 30 percent of his gross annual base income from employment, up to $600,000—meaning, a maximum of $15,000 a month (if he did not receive a bonus). And, indeed, for years, the plaintiff paid the defendant thousands of dollars a month in alimony. Although the law and the separation agreement account for changes in circumstances, the plaintiff, as the moving party, is required to “demonstrate that circumstances have changed since the last court order such that it would be unjust or inequitable to hold either party to it.” (Internal quotation marks omitted.) Olson v. Mohammadu, 310 Conn. 665, 672, 81 A.3d 215 (2013). The plaintiff‘s interpretation that he was required to pay the defendant only $875 a month in alimony would be a dramatic departure from the agreement they negotiated, and, therefore, he bore the burden of proving a change of circumstances to justify a new order. In the end, the trial court did not hold the plaintiff to the expectation that he pay tens of thousands of dollars a month in alimony, even if the defendant thought she would be receiving the higher amount she was accustomed to in the years immediately following the parties’ divorce. After hearing evidence, the trial court was constrained to observe that the plaintiff had failed to establish how he earned his commissions, why his purported debt to Cushman & Wakefield fluctuated, how much of his commissions were applied to his draws, and why he did not pay alimony on commissions he earned. The trial court‘s skepticism toward the plaintiff‘s calculation of his alimony obligation in light of his new arrangement was well founded. We conclude that the trial court correctly interpreted the parties’ separation agreement and that its findings were not clearly erroneous.
II
The plaintiff next claims that the trial court also premised its decision on the amended motion for contempt on an incorrect interpretation of the parties’ separation agreement and a clearly erroneous finding that money earned by and paid to his LLC was his personal income and subject to alimony. The plaintiff argues that the money paid to the LLC was not income subject to his alimony obligation because
Interpretation of an ambiguous contract is a question of fact. E.g., Nation-Bailey v. Bailey, supra, 316 Conn. 192. A finding of fact is clearly erroneous when no evidence in the record supports it or when the reviewing court is “left with the definite and firm conviction that a mistake has been committеd.” (Internal quotation marks omitted.) Remillard v. Remillard, supra, 297 Conn. 356.
Due to the ambiguity in the term “income,” we also must determine whether the trial court was correct about whether payments to the LLC fell within the scope of that definition. In 2014, the plaintiff created a limited liability company called SNB NYC Consulting, LLC. He was a 50 percent member of the LLC with his new wife until 2019; he is now the sole member. Since 2017, the plaintiff has elected to have the LLC taxed as an S corporation.7 The plaintiff similarly chose to have his Cushman & Wakefield draws and money earned from other consulting services deposited into the LLC‘s account. We agree with the trial court that the plaintiff cannot structure the receipt of his income and use the corporate form to avoid his alimony obligation. As the trial court found, “[w]hile such manipulations may have yielded tax benefits to the [plaintiff], there was no evidence [they] were necessary to earn this income.” The trial court specifically found that “[m]any of the claimed business deductions by [the LLC] appeared to be entirely personal expenses of the [plaintiff] and his new wife. More importantly, the actual business activities of [the LLC] appear to consist only of taking moneys already received by the [plaintiff] and finding ways to claim deductions and expenses to shelter this income and/or hide it from the [defendant].” Also, nothing in the separation agreement addresses business related expenses. These facts, as found by the trial court, are not clearly erroneous and support the court‘s determination that the LLC was used to shield the plaintiff‘s income from his alimony obligations, that the income was properly subject to alimony, and that the plaintiff was not entitled to business expense deductions.
The fact that it may be advantageous for tax purposes to set up an LLC has no bearing on the determination that the income is properly subject to alimony. Our decision in Tuckman v. Tuckman, 308 Conn. 194, 61 A.3d 449 (2013), is instructive. In Tuckman, the defendant challenged the trial court‘s determination that, when fixing alimony and child support, her taxable income from an S corporation8 should be included in her annual net income. Id., 208-209. This court, in considering how to treat “the retained earnings of an S corporation that are passed through to a shareholder for purposes of measuring and imposing a child support obligation,” followed the Massachusetts Supreme Judicial Court‘s decision in J.S. v. C.C., 454 Mass. 652, 662-63, 912 N.E.2d 933 (2009), which concluded that “[t]he better reasoned decisions require a [case specific], factual inquiry and determination . . . .” We follow the lead of these cases, and similarly conclude that a determination whether and to what extent the undistributed earnings of an S corporation should be deemed available income to meet a child support obligation must be made based on the particular circumstances presented in each case. Such a [fact based] inquiry is necessary to balance, inter alia, the considerations that a [well managed] corporation may be required to retain a portion of its earnings to maintain corporate operations and survive fluctuations in income, but corporate structures should not be used to shield available income that could and should serve as available sources of child support funds.” (Internal quotation marks omitted.) Tuckman v. Tuckman, supra, 210-11. In Tuckman, this court detailed some relevant factors trial courts should weigh “in determining what portion of undistributed corporate earnings may be available to a shareholder for a child support obligation“: (1) the shareholder‘s level of control over corporate distributions, as measured by the shareholder‘s ownership interest, (2) legitimate business interests justifying retained corporate earnings, and (3) evidence of an attempt to shield income by means of retained earnings. Id., 211. In the present case, to determine that the earnings deposited in the plaintiff‘s LLC account were attributable to him as income under the separation agreement, the trial court properly conducted just suсh a fact based inquiry.
The plaintiff relies on Yomtov v. Yomtov, 152 Conn. App. 355, 98 A.3d 110 (2014), in which the Appellate Court held that, because an LLC is a “distinct legal entity whose existence is separate from its members“; (internal quotation marks omitted) id., 362; income must be actually received by the plaintiff, and not the LLC, to be properly subject to alimony obligations. The defendant argues that Yomtov is distinguishable because, in that case, there was no dispute that the money in question was initially gross revenue to the LLC and the LLC existed at the time the parties signed their separation agreement, whereas, in the present case, the trial court was not required to accept the plaintiff‘s claim that the LLC earned revenue separate from his own income.
III
The plaintiff also claims that the trial court incorrectly modified his future alimony obligation based on a net annual income and earning capacity not supported by the record. He argues that the trial court did not take into account all relevant statutory criteria and that the only factor the court considered was his past gross income. The defendant responds that the trial court did not abuse its discretion because the record supports the alimony award. She also notes that the trial court‘s memorandum of decision expressly states that the court considered all relevant statutory factors, and there is no requirement that it use a precise formula to calculate available net income. We agree with the defendant.
Addressing the plaintiff‘s motion for modification, the trial court found that there had indeed been a substantial change in circumstances that necessitated a modification to the plaintiff‘s alimony obligation. Specifically, after considering all the factors required by
“An appellate court will not disturb a trial court‘s orders in domestic relations cases unless the court has abused its discretion or it is found that it could not reasonably conclude as it did, based on the facts presented. . . . In determining whether a trial court has abused its broad discretion in domestic relations matters, we allow every reasonable presumption in favor of the correctness of its action.” (Internal quotation marks omitted.) Morris v. Morris, 262 Conn. 299, 305, 811 A.2d 1283 (2003). “To the extent that the trial court has made findings of fact, our review is limited to deciding whether such findings were clearly erroneous.” (Internal quotation marks omitted.) Light v. Grimes, 156 Conn. App. 53, 64, 111 A.3d 551 (2015). “[General Statutes §] 46b-86 governs the modification or termination of an alimony or support order after the date of a dissolution
“[A] court must base child support and alimony orders on the available net income of the parties, not gross income.” Morris v. Morris, supra, 262 Conn. 306. However, a “trial court may under appropriate circumstances in a marital dissolution proceeding base financial awards [pursuant to
Sufficient evidence in the record supported the trial court‘s findings regarding the plaintiff‘s earning capacity such that its award of a monthly alimony obligation of $6500 was not an abuse оf discretion. The trial court based its modified award not only on the plaintiff‘s past gross earnings but also on his long and successful career as a senior executive, broker, and consultant, and his move to a state without a state income tax. The court‘s order specifically provided for a “second look” when the plaintiff reaches the age of sixty-five. The trial court also based its decision on the income and income earning potential of both parties. It could have been an abuse of discretion for the court to have based its decision solely on the plaintiff‘s past gross income without taking into account any other facts or circumstances whatsoever, but the trial court expressly noted that its alimony determination was anchored on the conclusion that the plaintiff‘s net earning capacity was $250,000, which is markedly less than his past gross annual income of $350,000 from mid-2015 to September, 2019. The trial court‘s alimony award of $6500 per month therefore did not amount to an abuse of discretion.
IV
The plaintiff challenges the trial court‘s finding of contempt against him for breaching his alimony obligation because he claims that his nonpayment was based on a good faith belief that he did not owe alimony on money received from Cushman & Wakefield and on revenue to his LLC. Specifically, he argues that the language of the separation agreement was not clear and that his actions were not wilful because he sought and relied on the advice of professional advisors. The defendant argues that the overall obligation to pay alimony in the separation agreement was clear and unambiguous, that the plaintiff‘s actions were wilful because he took unilateral action, and that, although he testified that he consulted with professional advisors for tax purposes, there was no evidence that he received advice related to the calculation of the amount of his alimony
“It is the burden of the party seeking an order of contempt to prove, by clear and convincing evidence, both a clear and unambiguous directive to the alleged contemnor and the alleged contemnor‘s wilful noncompliance with that directive.” Puff v. Puff, 334 Conn. 341, 365, 222 A.3d 493 (2020). The question of whether the underlying order is clear and unambiguous is a legal inquiry subject to de novo review. See, e.g., In re Leah S., 284 Conn. 685, 693, 935 A.2d 1021 (2007). We review the trial court‘s determination that the violation was wilful under the abuse of discretion standard. See id., 693-94.
The present case involves allegations of indirect civil contempt. “A refusal to comply with an injunctive decree is an indirect contempt of court because it occurs outside the presence of the trial court.” (Internal quotation marks omitted.) Brody v. Brody, 315 Conn. 300, 317, 105 A.3d 887 (2015). “[C]ivil contempt is committed when a person violates an order of [the] court which requires that person in specific and definite language to do or refrain from doing an act or series of acts.” (Emphasis omitted; internal quotation marks omitted.) Gabriel v. Gabriel, 324 Conn. 324, 333, 152 A.3d 1230 (2016).
Addressing the defendant‘s motion for contempt, the trial court found that “the obligation in question, to pay alimony pursuant to the [separation] [a]greement, is clear and unambiguous. The court finds that the [plain-tiff] did fail to pay the amounts due, [and] such failure to pay was wilful and that both of these elements were established by clear and convincing evidence.” The trial court went on to state that it could award the defendant her requested relief “independent[ly] of any finding of contempt” because the plaintiff had breached his alimony obligation under the separation agreement, and the agreement contained a fee shifting provision. See footnote 1 of this opinion. Although the defendant requested $88,789 in attorney‘s fees, the trial court awarded her $80,000.
We conclude that the trial court did not abuse its discretion in finding the plaintiff in contempt. During the time in question, the plaintiff did not pay any alimony on Cushman & Wakefield commissions he in fact earned, totaling $439,919, or on other self-employment income not subject to any claim of repayment, totaling $653,639.12 It was sufficiently clear from the terms of the separation agreement that the plaintiff had to pay alimony on commissions he did earn and other consulting income, thereby constituting independent violations to support the finding of contempt. Notwithstanding our determination that it is not clear and unambiguous from the terms of the separation agreement whether the plaintiff‘s draws constituted income or a loan, we also agree with the trial court that it is untenable on this record to conclude that the plaintiff did not wilfully fail to fully comply with his obligation to pay as alimony 30 percent of his gross annual base income from employment “in whatever form received” from “any and all sources derived,” including consulting or commission work paid to him or to his LLC. As the trial court found, through his LLC, the plaintiff treated his income in a “byzantine and highly structured manner” to the detriment of the defendant. As a result, in the four years in question, the plaintiff earned a gross income
Moreover, any ambiguity in the definition of “income” in the separation agreement does not affect our conclusion because it is abundantly clear that this was not a good faith dispute or legitimate misunderstanding. “A party to a court proceeding must obey the court‘s orders unless and until they are modified or rescinded, and may not engage in ‘self-help’ by disobeying a court order to achieve the party‘s desired end.” Hall v. Hall, 335 Conn. 377, 397, 238 A.3d 687 (2020). The principle against self-help often applies in situations “in which previously compliant parties stopped complying with court orders after changes in circumstances rendered the orders unclear without first seeking judicial clarification or modification.” In re Leah S., supra, 284 Conn. 700.
In Eldridge v. Eldridge, 244 Conn. 523, 710 A.2d 757 (1998), this court recognized that, although contempt is ” ‘particularly harsh,’ ” a good faith dispute or legitimate misunderstanding does not preclude a finding of wilfulness as a predicate to a judgment of contempt. Id., 529. In affirming the contempt order in Eldridge, this court reasoned that (1) the plaintiff should have moved to modify his alimony obligation prior to unilaterally suspending periodic alimony payments, (2) the plaintiff had thе ability to comply and chose not to comply, and (3) the fact that the plaintiff was ultimately proven correct that he was owed a credit from the defendant did not undermine the trial court‘s determination that the plaintiff‘s behavior was contemptuous. See id., 529-34. We explained in Eldridge: “This is not a case in which the [plaintiff] did not have the ability to comply. Rather, he chose not to. The fact that the plaintiff ultimately was proven correct in his calculations of the various debits and credits between him and the defendant does not mean . . . that the court was precluded from finding him in contempt as a matter of law. Whether to find a party in contempt is ultimately a matter within the trial court‘s discretion. The trial court could have exercised its discretion so as not to find the plaintiff in contempt. The fact that the plaintiff exercised self-help when he was not entitled to do so, however, by disobeying the court‘s order without first seeking a modification was a sufficient basis for the trial court‘s contrary exercise of discretion. The court was entitled to determine that to exonerate the plaintiff would be an undue inducement to litigants’ exercise of self-help.” (Emphasis omitted.) Id., 532.
In Sablosky v. Sablosky, 258 Conn. 713, 784 A.2d 890 (2001), this court cited Eldridge approvingly and concluded that, “[when] there is an ambiguous term in a judgment, a party must seek a clarification upon motion rather than resort to self-help. Id., 720. The appropriate remedy for doubt about the meaning of a judgment is to seek a judicial resolution of any ambiguity; it is not to resort to self-help.” Although Sablosky presented the issue of child support orders, this court reasoned that it was similar to when “a party makes a motion for modification of a support order on the ground of a substantial change in circumstances. Although one party may believe that his or her situation satisfies this standard,
The present case is similar to Eldridge and Sablosky. The plaintiff unilaterally reduced his alimony when he first began his employment with Cushman & Wakefield in 2015. Article V, § 5.8, of the separation agreement provides only that the “[plaintiff] shall not make an application to any [c]ourt for modification of his obligations pursuant to this [a]rticle V on the basis of the [defendant‘s] income unless she earns more than $35,000 in any year . . . .” (Emphasis added.) The separation agreement, therefore, does not prevent the plaintiff from seeking to modify his alimony obligation, as long as it is for a reason other than the defendant‘s income increasing, but not surpassing, $35,000 in any year. The plaintiff filed the motion to modify his alimony obligation only after the defendant filed her motions for postjudgment contempt for the plaintiff‘s failure to pay alimony to her as contemplated by the separation agreement for the preceding four years. In Eldridge, the plaintiff was explicitly directed in a prior Appellate Court decision “to seek the assistance of the court and not to engage in self-help“; Eldridge v. Eldridge, supra, 244 Conn. 531; and, therefore, we held in that case that the trial court “properly concluded that the plaintiff was not justified in his stated belief that he simply could withhold payments and . . . that his explanations were not adequate to explain his failure to obey the court order.” Id., 531-32. In the present case, the fact that the plaintiff reached out to the defendant when he began his employment with Cushman & Wakefield to adjust his alimony payments because the payment structure was “a little complicated” should have alerted him to the need to seek the advice of the court concerning the future calculation of his alimony payments. We recognize that, in other cases, a party facing a potentially ambiguous court order after a change in circumstances can avoid being held in contempt due to a reasonable mistake, without first resorting to the court, by proceeding in good faith. In this case, the plaintiff crossed the line from whаt could have been a good faith misunderstanding to knowingly taking advantage of an ambiguity at the expense of the defendant. The plaintiff cannot use that ambiguity to escape contempt.
Last, the plaintiff conceded that he did not pay alimony on commissions he did earn at Cushman & Wakefield, as well as on money paid to him in connection with other consulting work. This concession “seriously undermine[s] any contention that the ambiguity entitled the [plaintiff] to eschew seeking the court‘s advice and, instead, to resort to self-help.” Sablosky v. Sablosky, supra, 258 Conn. 720-21. Accordingly, we uphold the trial court‘s finding of contempt.
The decision of the trial court is affirmed.
In this opinion the other justices concurred.