Powell-Ferri v. FerriPowell-Ferri v. Ferri
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The plaintiff appealed from the judgment of the trial court dissolving her marriage to the defendant, who was the sole beneficiary of two trusts, and granting certain other relief. Prior to the parties’ marriage, the defendant‘s father settled the first trust, which was used primarily for investment purposes but was also used to fund certain improvements to the marital home and to pay the parties’ taxes. After the commencement of the dissolution action, the trustees of that trust decanted a substantial portion of its assets to create a second, spendthrift trust for the defendant‘s sole benefit. In a related declaratory judgment action, the court determined that the decanting was improper and ordered the return of 75 percent of the assets to the first trust. The trial court in the present case determined that the assets subject to that order were marital property but declined to divide them equally as the plaintiff had requested. In reaching its conclusion, the trial court recognized that any assets remaining in the spendthrift trust following resolution of a pending appeal in the declaratory judgment action were not marital property. The trial court also denied the plaintiff‘s motion for contempt, in which the plaintiff had claimed that the rule of practice (§ 25-5) governing automatic orders in dissolution proceedings required the defendant to bring a civil action against the trustees to challenge the decanting of assets, and ordered the defendant to pay attorney‘s fees to the plaintiff in an amount equal to what he paid his own attorneys, but only until he made his first lump sum alimony payment. On appeal, the plaintiff claimed that the trial court incorrectly found that she had not contributed to the value of the first trust, improperly declined to find the defendant in contempt, incorrectly failed to include the value of the spendthrift trust in the marital estate, and improperly structured its award of attorney‘s fees. Held:
1. The plaintiff could not prevail on her claim that the trial court incorrectly found that she did not contribute to the value of the first trust: even if this court were to accept the plaintiff‘s factual assertions as true, in light of the conclusion set forth in Ferri v. Powell-Ferri (326 Conn. ) that the trustees’ decision to decant was proper and the fact that the decanted assets could not be reached once they were placed into the spendthrift trust, the assets from the first trust could not be considered as part of the dissolution judgment and, thus, it was unnecessary to consider the merits of the plaintiff‘s arguments concerning her contributions to the value of the first trust.
2. The trial court did not abuse its discretion in declining to find the defendant in contempt, this court having concluded that the automatic orders required by
3. The trial court did not abuse its discretion in failing to consider the entire value of the spendthrift trust as a marital asset on the ground that the defendant possessed a chose in action for breach of fiduciary duty against the trustees in an equal amount; although a chose in action existing at the time of dissolution can be classified as an intangible property interest subject to distribution in a dissolution proceeding, the defendant in the present case possessed no such interest because the trustees acted lawfully and in his best interest, and the plaintiff failed
4. The trial court‘s award of attorney‘s fees did not constitute an abuse of discretion: the structure of the trial court‘s award of attorney‘s fees, which was based on the amount the defendant paid to his attorneys and which terminated upon his first lump sum alimony payment, was not an abuse of discretion in the absence of evidence that the defendant had failed to pay his attorneys or would fail to do so in the future; furthermore, the trial court did not abuse its discretion in determining that the payment of some legal costs by the plaintiff would not undermine its financial orders in light of the significant awards of alimony and child support, substantial litigation expenses incurred by the defendant, and the trial court‘s other financial orders.
EVELEIGH, J. This appeal arises from an action dissolving the marriage of the plaintiff, Nancy Powell-Ferri, and the defendant, Paul John Ferri, Jr. (Ferri). On appeal, Powell-Ferri challenges numerous financial orders entered by the trial court. Specifically, Powell-Ferri asserts that the trial court incorrectly (1) determined that she did not contribute to a trust created by Ferri‘s father, Paul John Ferri, Sr., in 1983 (1983 trust), (2) denied her motion for contempt, (3) determined that a trust created in 2011 (2011 trust) was not a marital asset, and (4) structured the award of attorney‘s fees. We disagree with Powell-Ferri and, accordingly, affirm the judgment of the trial court.
In its memorandum of decision, the trial court set forth the following relevant facts and procedural history. The trial court dissolved the parties’ marriage in August, 2014, and entered financial orders. At the time of dissolution, the parties had been married for nineteen years and had three daughters, all of whom were minors. Powell-Ferri was a homemaker throughout the marriage, taking care of all three children and the family household. For most of the marriage, the parties lived in a home they owned in Farmington. Ferri briefly worked for his father‘s venture capital firm, Matrix Partners, but for the majority of the marriage, his income was derived from numerous Valvoline franchises (franchises).
Ferri is the sole beneficiary of the 1983 trust. The 1983 trust is central to the underlying dissolution action, and the parties’ use of the trust during the marriage strongly informed the trial court‘s financial orders. The parties did not rely on the trust for their daily living expenses. Ferri primarily used the 1983 trust for investment purposes. There were a few instances during the marriage when the 1983 trust was not used for purely investment purposes; for example, the trust provided $300,000 toward home improvements and regularly paid the parties’ taxes. The parties, in turn, regularly contributed their tax refund checks to the trust. Ferri also used funds from the trust during the marriage to purchase ownership interests in the franchises. In March, 2011, while the underlying dissolution action was pending, the trustees of the 1983 trust (trustees) created a second trust whose sole beneficiary was Ferri (2011 trust). The trustees then decanted a substantial portion of the assets in the 1983 trust to the 2011 trust.
Throughout the divorce, the parties disputed the valuation of the 1983 trust. The trustees valued the trust at approximately $69 million, Powell-Ferri valued it at approximately $98 million, and Ferri at approximately $80.5 million. The majority of the trust value derived from three assets: securities, hedge and investment funds, and various limited liability companies related
Although the trial court determined 75 percent of the assets transferred from the 1983 trust to be marital property, it did not divide those assets equally as Powell-Ferri had requested. The trial court found that Powell-Ferri had requested too great a share of those assets because the 1983 trust represented a sum of money that the parties knew they had in reserve so that they would “always be free from want or need in the lifestyle they had established.” The trial court recognized that the 1983 trust was “an asset that [Ferri] brought to the marriage, that it is the initial product of the labor of his father, not him, and that it should be left sufficiently intact so that it may be used for investment . . . purposes as [Ferri] had envisioned it.” The court also recognized that whatever assets remained in the 2011 trust following an appeal in the declaratory judgment action; see footnote 1 of this opinion; were not marital assets because Ferri had no present or future entitlement to those funds.
On the basis of that separate action and the uncertainty as to the validity of the decanting, the trial court fashioned two alternative financial orders. The first order contemplated a return of assets to the 1983 trust. The second order assumed that the trustees’ decision to decant was upheld on appeal and that the assets of the 2011 trust were left undisturbed. Under the first order, Ferri was required to pay Powell-Ferri $12 million in lump sum alimony over the course of several years. The trial court found that, under this scenario, it was “equitable to order a sufficient lump sum alimony [so] that [Powell-Ferri] will have no need for dependency on [Ferri] in the future.” Conversely, under the second order, Ferri was required to pay, inter alia, $25,000 per month in alimony.
As we explained more fully in the appeal pertaining to the declaratory judgment action; Ferri v. Powell-Ferri, 326 Conn. , A.3d (2017); the issue of
I
Powell-Ferri‘s first claim on appeal is that the trial court incorrectly determined that she did not contribute to the value of the 1983 trust. Powell-Ferri identifies two reasons why the trial court‘s finding was incorrect: (1) her homemaking efforts allowed Ferri to develop the business assets that comprise a significant portion of the 1983 trust; and (2) she regularly funded the 1983 trust by contributing substantial tax refund checks. Even if we accept Powell-Ferri‘s assertions in this regard, the Massachusetts Supreme Judicial Court has determined that the decanting was appropriate. Consequently, the assets from the 1983 trust cannot be considered as part of the dissolution judgment in the present case.
We begin our analysis with the standard of review applicable to a trial court‘s financial orders. “The standard of review in family matters is well settled. 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. . . . It is within the province of the trial court to find facts and draw proper inferences from the evidence 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. . . . [T]o conclude that
As we explained previously in this opinion, the trial court drafted two financial orders. The first order, which was to be used if the decanting was found to be improper, considered 75 percent of the original assets from the 1983 trust. The second order, which would continue in the event that the decanting was found to be appropriate, did not include consideration of any assets from either trust. Neither party has challenged the latter. Because the Massachusetts Supreme Judicial Court found that the trustees’ decision to decant was proper, virtually all of the assets from the 1983 trust were effectively transferred into the 2011 trust.
The 2011 trust is a spendthrift trust and, thus, is not considered an asset of the marital estate that the court may divide under
We note that, although the trial court could not consider the assets decanted to the 2011 trust for equitable distribution purposes, it could, and did, consider Ferri‘s ability to earn additional income when creating its alimony orders under
We have repeatedly recognized that “[i]n determining the assignment of marital property under
Because the Massachusetts Supreme Judicial Court determined that the decanting was proper, and because those assets could not be reached once placed in the 2011 trust, we need not consider Powell-Ferri‘s arguments concerning contributions to the 1983 trust.
II
Powell-Ferri next claims that the trial court improperly declined to find Ferri in contempt. Specifically, Powell-Ferri claims that the trial court incorrectly found that Ferri did not have an obligation under
We begin with general principles of law and the applicable standards of review. “Contempt is a disobedience to the rules and orders of a court which has power to punish for such an offense.” (Internal quotation marks omitted.) In re Leah S., 284 Conn. 685, 692, 935 A.2d 1021 (2007). A contempt judgment cannot stand when, inter alia, the order a contemnor is held to have violated is vague and indefinite, or when “the contemnor, through no fault of his own, was unable to obey the court‘s order.” (Internal quotation marks omitted.) Id. Consistent with the foregoing, when we review such a judgment, we first consider the “threshold question of whether the underlying order constituted a court order that was sufficiently clear and unambiguous so as to support a judgment of contempt.” Id., 693. This question presents a legal inquiry subject to de novo review. Id. “Second, if we conclude that the underlying court order
We first note that the automatic orders do not apply to the trustees’ actions. The automatic orders, by their explicit terms, do not apply to nonparties.
In support of her conclusion that Ferri violated the automatic orders, Powell-Ferri embarks upon an unconvincing analysis of the term ” ‘dispose of’ ” in an attempt to reach a definition that encompasses Ferri‘s actions, or lack thereof. Powell-Ferri ultimately declares that ” ‘dispose of’ ” is equivalent in meaning to ” ‘relinquish.’ ” Powell-Ferri suggests that, even though Ferri did not take an active role in decanting the trust, he nevertheless violated the automatic orders because he “relinquished” his right to 75 percent of the 1983 trust when he failed to bring a civil action against the trustees in order to recover those assets. This claim is not persuasive for two reasons.
First, Powell-Ferri‘s interpretation of the obligations imposed by
Powell-Ferri has failed to convince us that Ferri‘s failure to bring an action against the trustees was equivalent to a dissipation of marital property in violation of
Powell-Ferri also claims that numerous cases from other jurisdictions support her conclusion that Ferri‘s failure to act violated
Second, Powell-Ferri‘s argument is not supported by our rules of practice. Nothing in our rules of practice requires a party to file an action against a third party whenever he or she may have a viable cause of action, particularly when the third party acted lawfully and in that party‘s best interest. There are numerous reasons why a party may choose not to bring an action. The trial court found that Ferri declined to take action because he did not want to bring an action against his family and because he believed that the trustees acted in his best interest. Even if Ferri believed that he would be successful in an action against the trustees, he reasonably could have concluded it would not be worth alienating his family to recover discretionary control over assets that he evinced little interest in using.
Furthermore, imposing an obligation on parties in divorce proceedings to bring separate actions against third parties, particularly when that party feels that filing such an action is against their best interest, is poor public policy and could lead to untenable results. For example, if a party was obligated to bring such an action whenever their spouse claimed that they are potentially entitled to recover damages, that party may feel compelled to bring such an action by the prospect of sanctions for dissipation of assets. If that separate action fails, however, that same party may then be accused of dissipating assets by pursuing a meritless civil claim.
The automatic orders do not require Ferri to take all conceivable actions to recover assets not under his control. Powell-Ferri claims that
III
Powell-Ferri also claims that the value of the entire 2011 trust, not just the 75 percent that the trial court ordered returned, should have been designated as marital property because Ferri has a chose in action for the entire value of the 1983 trust. The Massachusetts Supreme Judicial Court held that the trustees were authorized to decant all of the assets, and, therefore, none of the 1983 trust is a marital asset. Powell-Ferri argues that even if the trustees acted lawfully and Ferri believes that their actions were in his best interest, he nevertheless has a concrete chose in action for breach of fiduciary duty against the trustees that the trial court should have considered as a marital asset. We disagree.
We review the trial court‘s decision to disregard Powell-Ferri‘s chose of action claim in fashioning its financial orders for abuse of discretion. See Weinstein v. Weinstein, supra, 280 Conn. 774–75; see also Hornung v. Hornung, 323 Conn. 144, 152, 146 A.3d 912 (2016) (“financial orders in family matters are generally reviewed for an abuse of discretion“).
Powell-Ferri does not dispute that the trial court correctly recognized that the 2011 trust was not marital property because it was a spendthrift trust. See Zeoli v. Commissioner of Social Services, supra, 179 Conn. 88 (“[a] trust which creates a fund for the benefit of another, secures it against the beneficiary‘s own improvidence, and places it beyond the reach of his creditors is a spendthrift trust“); Cooley v. Cooley, 32 Conn. App. 152, 169, 628 A.2d 608 (judgment in dissolution action established former spouse‘s status as judgment creditor), cert. denied, 228 Conn. 901, 634 A.2d 295 (1993). The Massachusetts Supreme Judicial Court determined that the decanting of the 1983 trust was permitted, meaning that virtually all of the trust assets were beyond the trial court‘s consideration in the dissolution action. Nevertheless, Powell-Ferri asserts that
Powell-Ferri fails to establish that Ferri had a chose in action that the court could have distributed. A chose in action can be classified as an intangible property interest subject to distribution under
Moreover, Powell-Ferri does not point to any evidence that the trustees breached their fiduciary duty to Ferri. The trial court found that “[a]s of yet, there has been no finding of a breach of duty by them, notwithstanding Powell-Ferri‘s vigorous argument that
Powell-Ferri‘s assertion is contradicted by Ferri‘s testimony and the parties’ use of the 1983 trust throughout the marriage. The trial court found that Ferri declined to challenge the decanting in court because he did not want to bring a civil action against his family, because he thought that the trustees acted in his best interest, and because he did not think that Powell-Ferri should share in any of the assets of the 1983 trust. Furthermore, Ferri envisioned the trust as being for investment purposes. The parties’ conduct prior to divorce supports Ferri‘s assertion. Throughout the course of the marriage, the parties rarely used the 1983 trust assets. Apart from funding a renovation of the marital home and paying the parties’ taxes, the 1983 trust was used only for investing in the franchises. There is no evidence that Ferri ever intended to withdraw a substantial portion of the 1983 trust.
Powell-Ferri also claims that Ferri has a chose in action because decanting of the trust assets may have exposed him and the trust to substantial tax liability. Powell-Ferri cites numerous tax provisions but presents no evidence that Ferri or the trust has actually incurred such a liability. Furthermore, even if this court was to assume that such a liability existed, Powell-Ferri does not indicate what the amount of that liability would be. If, for example, the tax liability was equal to 49.9 percent of the decanted assets, Ferri could still think that he was better off paying those taxes than if the court granted Powell-Ferri the 50 percent that she sought. Accordingly, we conclude that the trial court did not abuse its discretion in failing to consider the value of the 2011 trust as a marital asset.
IV
Powell-Ferri also claims that the trial court incorrectly structured the award of attorney‘s fees in the dissolution action. Specifically, Powell-Ferri asserts that the trial court abused its discretion in fashioning
The following additional facts are relevant to our resolution of this claim. The trial court found that there were “insufficient funds available for [Powell-Ferri] to pay her fees and costs related to this litigation . . . .” The trial court concluded that requiring Powell-Ferri to bear “these costs would be unduly burdensome and result in an undermining of these financial orders . . . .” Therefore, the trial court ordered Ferri to pay Powell-Ferri‘s attorneys an amount equal to what he paid his own attorneys. The trial court, however, limited this obligation to the amount Ferri owed his attorney at the time of trial.
We begin with the applicable standard of review. “Courts ordinarily award counsel fees in divorce cases so that a party . . . may not be deprived of [his or] her rights because of lack of funds. . . . Where, because of other orders, both parties are financially able to pay their own counsel fees they should be permitted to do so. . . . An exception to the rule . . . is that an award of attorney‘s fees is justified even where both parties are financially able to pay their own fees if the failure to make an award would undermine its prior financial orders . . . . Whether to allow counsel fees . . . and if so in what amount, calls for the exercise of judicial discretion. . . . An abuse of discretion in granting counsel fees will be found only if [an appellate court] determines that the trial court could not reasonably have concluded as it did.” (Internal quotation marks omitted.) Jewett v. Jewett, 265 Conn. 669, 694, 830 A.2d 193 (2003).
Powell-Ferri argues that Ferri can easily avoid paying attorney‘s fees because of the manner in which the trial court structured its award. She contends that, under the trial court‘s order, all Ferri has to do is not pay his attorneys, or at least wait to pay them until after he makes his first installment of the lump sum alimony. The claim is premised upon the fact that the obligation to pay the plaintiff‘s attorneys was contingent on what the defendant pays his own attorneys and ends upon the first installment of lump sum alimony. Powell-Ferri maintains that the award defies logic because ir does not correlate to the stated objective and allows the obligor to manipulate his obligation to pay attorney‘s fees.
In the present case, there is no evidence in the record that Ferri has not paid his attorneys or that he will fail to do so in the future. Further, the trial court did not
The judgment is affirmed.
In this opinion the other justices concurred.
* This case was originally argued before a panel of this court consisting of Justices Palmer, Zarella, Eveleigh, McDonald, Espinosa and Robinson. Thereafter, Justice Zarella retired from this court and did not participate in the consideration of the case. The listing of judges reflects their seniority status on this court as of the date of oral argument.
Notes
“(b) A conveyance made pursuant to the decree shall vest title in the purchaser, and shall bind all persons entitled to life estates and remainder interests in the same manner as a sale ordered by the court pursuant to the provisions of
“(c) In fixing the nature and value of the property, if any, to be assigned, the court, after considering all the evidence presented by each party, shall consider the length of the marriage, the causes for the annulment, dissolution of the marriage or legal separation, the age, health, station, occupation, amount and sources of income, earning capacity, vocational skills, education, employability, estate, liabilities and needs of each of the parties and the opportunity of each for future acquisition of capital assets and income. The court shall also consider the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estates.”
“(b) If the court, following a trial or hearing on the merits, enters an order
“(c) Any postjudgment procedure afforded by chapter 906 shall be available to secure the present and future financial interests of a party in connection with a final order for the periodic payment of alimony.”