FELICIA PIEROT BRODY v. CARY BRODY
(AC 36640)
Appellate Court of Connecticut
Submitted on briefs September 18—officially released November 4, 2014
Gruendel, Alvord and Borden, Js.
Appeal from Superior Court, judicial district of Stamford-Norwalk, Emons, J.
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Opinion
GRUENDEL, J. This appeal is but another chapter in a contentious dissolution saga. It concerns the trial court‘s authority to allow discovery in the context of a pending postjudgment motion for contempt. The plaintiff in error, Lara Brody (Brody), is the sister of the defendant in the underlying case, Cary Brody (defendant). See Brody v. Brody, 136 Conn. App. 773, 781, 51 A.3d 1121, cert. granted, 307 Conn. 910, 53 A.3d 998 (2012). Brody brought this writ of error from an order of the trial court requiring her to comply with a subpoena duces tecum issued by Felicia Pierot Brody, the plaintiff in the underlying case (plaintiff), in connection with her motion for contempt alleging fraudulent conduct on the part of the defendant.1 Brody contends that the court improperly denied her motions for a protective order and to quash that subpoena because it lacked authority to allow such discovery without first substantiating the plaintiff‘s allegations of fraud beyond mere suspicion in a court hearing, consistent with Oneglia v. Oneglia, 14 Conn. App. 267, 540 A.2d 713 (1988), and its progeny. We disagree and, accordingly, dismiss the writ of error.
In January, 2013, the defendant filed a motion to open the underlying judgment. Both the plaintiff and the defendant thereafter filed postjudgment motions for contempt. Pertinent to this appeal is the plaintiff‘s July 24, 2013 motion for contempt, which alleged in relevant part that “[a]mong the sanctions imposed by [the court as part of its December 9, 2011 finding of contempt] were that the defendant was to pay the plaintiff 50 percent of all income earned by him, to be credited against the defendant‘s alimony obligation; and that he was to pay 75 percent of other distributions to the plaintiff. . . . [U]pon information and belief the defendant has had income for which he has failed to make payments to the plaintiff as required by the existing orders entered . . . and he has received distributions that he has not shared with the plaintiff.”
Approximately two weeks later while her motion for contempt was pending, the plaintiff on August 6, 2013, served Brody with a subpoena duces tecum requiring her to produce certain documents and to appear at a deposition the following month.2 Brody is the manager of a hedge fund firm in Greenwich that, at all relevant times, employed the defendant. As the plaintiff‘s counsel stated at argument before the trial court: “[The subpoena was served on Brody] in connection with [the defendant‘s] continuing obligations, pursuant to a contempt finding of December 9, 2011 . . . in which [the court] ordered [that] the defendant shall pay the plaintiff 50 percent of all his net earnings as they‘re received towards the sums due. . . . He shall also pay her 75 percent of all return on investments and payment of capital.” Counsel for the plaintiff continued: “To say that [the defendant‘s] financial dealings are not transparent is a profound understatement. . . . I want records of any and all transactions in which [the defendant]
On August 30, 2013, Brody filed a motion to quash the subpoena and a motion for a protective order.3 After hearing argument from the parties on September 23, 2013, the court denied those motions. Brody filed this writ of error challenging the propriety of that determination on October 11, 2013.4
On appeal, Brody claims that the court improperly denied her motions to quash and for a protective order. As she posits in her writ of error, “there is no general right to postjudgment discovery in Connecticut . . . [and] no authority exists to justify a different rule simply because motions for sanctions are pending.”5 (Citations omitted.) Because the court did not conduct a hearing pursuant to Oneglia prior to denying her motions, Brody argues that the court lacked the authority to allow the plaintiff to engage in postjudgment discovery. Her claim presents an issue of law over which our review is plenary. See Hogan v. Lagosz, 147 Conn. App. 418, 433, 84 A.3d 434 (2013) (“our review of challenges to the authority of the court to act is plenary“); Bruno v. Bruno, 146 Conn. App. 214, 229–33, 76 A.3d 725 (2013) (engaging in plenary review of question of whether court lacked authority to allow postjudgment discovery).
I
Our analysis thus begins with a discussion of Oneglia v. Oneglia, supra, 14 Conn. App. 267, the seminal case on which Brody principally relies. Oneglia concerns the authority of a trial court to act on a request for postjudgment discovery pertaining to allegedly fraudulent conduct that transpired prior to the entry of the underlying judgment.
Oneglia and its progeny are grounded in the principle of the finality of judgments. See, e.g., Investment Associates v. Summit Associates, Inc., 309 Conn. 840, 855, 74 A.3d 1192 (2013) (“[t]he modern law of civil procedure suggests that even litigation about subject matter jurisdiction should take into account the importance of the principle of the finality of judgments” [internal quotation marks omitted]); Sawicki v. New Britain General Hospital, 302 Conn. 514, 522, 29 A.3d 453 (2011) (“[the courts have] a strong interest in the finality of judgments” [internal quotation marks omitted]). As we stated in Bruno v. Bruno, supra, 146 Conn. App. 229, the finality of judgments principle recognizes “the interest of the public as well as that of the parties [that] there be fixed a time after the expiration of which the controversy is to be regarded as settled and the parties freed of obligations to act further by virtue of having been summoned into or having appeared in the case. . . . Without such a rule, no judgment could be relied on.” (Citation omitted; internal quotation marks omitted.) Oneglia carefully balanced that interest in finality with the reality that “in some situations, the principle of protection of the finality of judgments must give way to the principle of fairness and equity.” Kim v. Magnotta, 249 Conn. 94, 109, 733 A.2d 809 (1999). The court in Oneglia thus ratified the gatekeeping mechanism employed by the trial court, whereby a court presented with a motion to open by a party alleging fraud in a postjudgment dissolution proceeding conducts a preliminary hearing to determine whether the allegations are substantiated. See Oneglia v. Oneglia, supra, 14 Conn. App. 269–70. The court held that “[i]f the plaintiff was able to substantiate her allegations of fraud beyond mere suspicion, then the court [properly] would open the judgment for the limited purpose of discovery, and would later issue an ultimate decision on the motion to open after discovery had been completed and another hearing held.” Id., 270; accord Spilke v. Spilke, 116 Conn. App. 590, 600, 976 A.2d 69 (court properly denied motion to open “because the plaintiff was unable to meet the minimal evidentiary threshold of establishing her allegations of fraud beyond a mere suspicion“), cert. denied, 294 Conn. 918, 984 A.2d 68 (2009); Nolan v. Nolan, 76 Conn. App. 583, 585, 586, 821 A.2d 772 (2003) (same); Mattson v. Mattson, 74 Conn. App. 242, 248, 811 A.2d 256 (2002)
This court recently revisited that precedent in Bruno v. Bruno, supra, 146 Conn. App. 214.7 The principal issue in that appeal was “whether the trial court erred by permitting the plaintiff [husband], and his current wife . . . to obtain discovery upon their filing of motions to open . . . on the basis of alleged fraudulent conduct on the part of the defendant [wife] without first substantiating their allegations of her fraud beyond mere suspicion in a court hearing.” Id., 216. The defendant maintained that the trial court lacked “authority to permit [postjudgment] discovery without first making a preliminary finding.” Id., 229. This court agreed, holding, consistent with Oneglia: “Until a motion to open has been granted, the earlier judgment is unaffected, which means that there is no active civil matter. . . . In this postjudgment posture, discovery is not available to the moving party for the simple reason that discovery is permitted only when a cause of action is pending.” (Citation omitted.) Id., 230–31. The court then articulated the proper mechanism by which such postjudgment discovery may be permitted, stating: “In considering a motion to open the judgment on the basis of fraud . . . the trial court must first determine whether there is probable cause to open the judgment for the limited purpose of proceeding with discovery related to the fraud claim. . . . This preliminary hearing is not intended to be a full scale trial on the merits of the [moving party‘s] claim. The [moving party] does not have to establish that he will prevail, only that there is probable cause to sustain the validity of the claim. . . . If the moving party demonstrates to the court that there is probable cause to believe that the judgment was obtained by fraud, the court may permit discovery.” (Citations omitted; internal quotation marks omitted.) Id., 231. Because the trial court in that case did not first determine “that the allegations of fraud undergirding the motions to open had some minimal indicia of merit,” we concluded that the court “lacked the authority to allow [postjudgment] discovery.” Id., 233.
Accordingly, a party seeking to obtain discovery related to allegedly fraudulent conduct that transpired prior to the entry of judgment must, consistent with the aforementioned precedent, (1) move to open that judgment and (2) demonstrate to the trial court that the allegations of fraud are founded on probable cause. Absent such evidence, the court lacks authority to permit postjudgment discovery on such matters.
It nevertheless remains that the plaintiff served the subpoena on Brody in connection with a pending motion for contempt pertaining to fraudulent conduct that allegedly transpired after the entry of judgment and involved noncompliance with the court‘s outstanding orders.8 The procedural posture of the present case distinguishes it from Oneglia, and demands a different analysis of the court‘s authority to act.
Motions for contempt implicate the court‘s inherent equitable authority to effectuate and vindicate its judgments. See AvalonBay Communities, Inc. v. Plan & Zoning Commission, 260 Conn. 232, 241, 796 A.2d 1164 (2002); accord Woodbury Knoll, LLC v. Shipman & Goodwin, LLP, 305 Conn. 750, 766 n.12, 48 A.3d 16 (2012) (“[t]he contempt penalty is one of the court‘s most important and deeply rooted enforcement powers“); Allstate Ins. Co. v. Mottolese, 261 Conn. 521, 530, 803 A.2d 311 (2002) (“purpose of the contempt power is to enable a court to preserve its dignity and to protect its proceedings” [internal quotation marks omitted]). As we recently explained: “Although ordinarily our trial courts lack jurisdiction to act in a case after the passage of four months from the date of judgment; see
Oneglia and its progeny do not implicate the trial court‘s continuing jurisdiction to effectuate its outstanding orders, but rather deal with allegations that an underlying judgment has been procured by fraud. For that reason, this court has held that a party may only engage in what we termed “postjudgment discovery” after the party first moves to open the judgment and establishes the allegations of fraud beyond mere suspicion. Oneglia v. Oneglia, supra, 14 Conn. App. 269–70; Bruno v. Bruno, supra, 146 Conn. App. 230–31.
By contrast, the present case plainly involves the court‘s continuing jurisdiction to effectuate and vindicate outstanding orders. The plaintiff‘s allegations of fraud arise from conduct subsequent to the entry of judgment and involve the defendant‘s allegedly wilful noncompliance with the court‘s outstanding orders. For that reason, no motion to open was needed to confer authority on the trial court to allow discovery, as the court‘s continuing jurisdiction over the matter necessarily conveyed upon it the authority to do so. See Rozbicki v. Gisselbrecht, supra, 152 Conn. App. 847. We therefore disagree with Brody‘s proposition that the strictures of Oneglia should be extended to postjudgment motions for contempt alleging fraudulent conduct.9 As this court has noted, “even in the absence of a finding of contempt, a trial court has broad discretion to make whole any party who has suffered as a result of another party‘s failure to comply with a court order.” Nelson v. Nelson, 13 Conn. App. 355, 367, 536 A.2d 985 (1988); see also AvalonBay Communities, Inc. v. Plan & Zoning Commission, supra, 260 Conn. 243 (citing Nelson with approval). In the present case, discovery was sought by the plaintiff not to make her whole, but simply to ascertain whether relief was necessary.
Absent an avenue of discovery, parties such as the plaintiff might effectively be precluded from meeting their burden of establishing contemptuous conduct. See Marshall v. Marshall, 151 Conn. App. 638, 651, 91 A.3d 1 (2014). “[C]ivil contempt is conduct directed against the rights of the opposing party. . . . Contempts of court may be classified as either direct or indirect, the test being whether the contempt is offered within or outside the presence of the court. . . . Failure to comply with a dissolution judgment is an indirect contempt because it occurred outside the presence of the court. . . . [A] finding of indirect civil contempt must be established by sufficient proof that is premised upon competent evidence presented to the trial court in accordance with the rules of procedure as in ordinary cases.” (Citations omitted; emphasis added; internal quotation marks omitted.) Lynn v. Lynn, 130 Conn. App. 319, 327, 23 A.3d 771 (2011). Permitting discovery as part of a postjudgment motion for contempt vindicates a party‘s interest in obtaining competent evidence of contempt, including contempt accomplished through fraudulent conduct. In so doing, it secures the court‘s fundamental interest in effectuating its outstanding orders.
As our Supreme Court has stated, “We have long recognized that the granting or denial of a discovery request rests in the sound discretion of the [trial] court, and is subject to reversal only if such an order constitutes an abuse of that discretion. . . . [I]t is only in rare instances that the trial court‘s decision will be disturbed.” (Internal quotation marks omitted.) Harp v. King, 266 Conn. 747, 771, 835 A.2d 953 (2003); see also Olson v. Accessory Controls & Equipment Corp., 254 Conn. 145, 176–77, 757 A.2d 14 (2000) (“[d]ecisions regarding discovery are best left to the trial court in its reasoned discretion“); Cersosimo v. Cersosimo, 188 Conn. 385, 394, 449 A.2d 1026 (1982) (noting bedrock “principle that all rulings for discovery are subject to the discretion of the trial court“). That ample discretion “is limited, however, by the provisions of the rules [of practice] pertaining to discovery; Practice Book §§ 217–221 [now §§ 13-2 through 13-5]; especially the mandatory provision that discovery shall be permitted if the disclosure sought would be of assistance in the prosecution or defense of the action.” (Emphasis in original; footnote omitted; internal quotation marks omitted.) Standard Tallow Corp. v. Jowdy, 190 Conn. 48, 58–59, 459 A.2d 503 (1983).
In sum, we conclude that the continuing jurisdiction of a trial court to effectuate and vindicate outstanding orders confers on it the authority to allow discovery in connection with postjudgment motions for contempt. The decision of when to exercise that authority is left to the sound discretion of the court.
III
We now apply the foregoing to the facts of this case. The gist of the plaintiff‘s pending motion for contempt was that the defendant engaged in fraudulent conduct by disguising earnings obtained while employed at his sister‘s hedge fund firm in violation of the court‘s orders requiring payment of certain earnings and distributions to her. The motion for contempt thus implicates the court‘s continuing jurisdiction to effectuate and vindicate outstanding orders. When Brody promptly filed motions challenging the propriety and permissibility of that discovery request, the court held a hearing thereon, at which the substance of that request was discussed in detail. At that time, counsel for the plaintiff articulated the basis of the discovery request and Brody‘s counsel articulated her objections thereto. Following argument, the court ruled in favor of the plaintiff, stating simply that it was denying Brody‘s motion to quash and that it was granting the plaintiff‘s discovery request. On our review of the record, we cannot say that the court, as an exercise of its continuing jurisdiction, abused its discretion in permitting such discovery.
The writ of error is dismissed.
In this opinion the other judges concurred.
Notes
“1. Produce all records of all monies paid to [the defendant] by you or by any third party or entity in which you have an interest, for any reason, including, but not limited to, wages, trading profits, commissions, bonuses, expenses or any other payment of money whatsoever for the period July 1, 2010, to the date of your deposition.
“2. Produce all records, including cancelled checks, wire transfers or other documentation showing loans, gifts or payments made to third parties for the benefit of [the defendant] by you or by any entity in which you have an interest for the period July 1, 2010, to the date of your deposition.
“3. Produce all records regarding the formation and/or operation of Patriot Strategy Partners LLC and Mayflower Advisors, LLC or any other entity for which [the defendant] has performed any services during the period July 1, 2010, to the date of your deposition.
“4. Produce records of all payments made to [the defendant], Colonial Fund or Colonial Investment Management, LLC or any related entity by you or by any third party and/or entity on your behalf for consulting fees, purchase of assets or for any other purpose for the period July 1, 2010, to the date of your deposition.
“5. Produce records of monthly statements for each and every credit card for which you or any entity in which you own a greater than 10% interest have paid for goods or services charged by [the defendant] for the period July 1, 2010, to the date of your deposition.”