Rousseau v. PerriconeRousseau v. Perricone
BEACH, J. In this marital dissolution action, the defendant, Madeleine Perricone, challenges certain property distribution and orders entered by the trial court in its judgment dissolving her marriage to the plaintiff, Robert Rousseau. The defendant claims that the court erred (1) by failing to strike the testimony of a certain witness after he refused to answer certain questions on cross-examination; (2) by not ordering the plaintiff to repay to her $500,000 that the defendant had transferred to him; (3) in ordering her to release the plaintiff and to hold him harmless from a pending civil action she had commenced in the trial court; and (4) in imposing a sanction on her for a discovery violation that her attorney allegedly committed. We affirm the judgment of the trial court.
The following facts, as found by the trial court, and procedural history are relevant to our resolution of this appeal. The parties met in November, 2006, through a dating service and married in July, 2007. They did not commingle assets during the marriаge except for investments in various cosmetics companies located in California.
The plaintiff had multiple business interests that predated his marriage to the defendant. His principal business was Preferred Display Incorporated (Preferred
Prior to their marriage, the parties traveled to California and had business discussions with various persons in the cosmetics industry, including Harry Haralambus. The defendant invested approximately $2 million and the plaintiff invested approximately $2.5 million in California cosmetics companies. As of the last day of trial, neither the plaintiff nor the defendant had seen a return on their investments.
The court did not find any merit to the defendant‘s claims that she made investments in the California cosmetics companies because of fraud, duress or undue influence on the part of the plaintiff. The court found that the investments were risky and that both the plaintiff and the defеndant voluntarily made what turned out to be bad investments. The court also imposed a $25,000 sanction on the defendant for failure to comply with discovery orders. This appeal followed. Additional facts will be set forth as necessary.
I
The defendant claims that the court erred in failing to strike the testimony of Haralambus after he refused to answer certain questions on cross-examination. We disagree.
Haralambus testified on direct examination that he had interests in cosmetics companies in California. The plaintiff and the defendant had invested in at least onе of the same companies. Haralambus wanted to enhance the value of the companies by combining them into a holding company. He testified that “[t]he holding company had been set up. However, the problem was that
On cross-examination, the following colloquy occurred:
“[The Defendant‘s Counsel]: Do you have documents concerning the consolidation or merger of these entities?
“[Haralambus]: The proper final consolidation has not occurred, because it‘s being held up by two shareholders or more. Correctly speaking, one shareholder, Madeleine, LLC.1 . . .
“[The Defendant‘s Counsel]: Can you tell me which ones have?
“[Haralambus]: It‘s confidential information.
“[The Defendant‘s Counsel]: Your Honor, I—the witness has to be instructed to answer.
“[Haralambus]: I‘d be breaching confidentiality agreements if I did.”
The defendant‘s counsel argued that “[t]his is аll about the decision by [the plaintiff] to call [Haralambus] to testify that because of [the defendant‘s] refusal to cooperate and become part of a roll up into a holding company, that the whole thing is now unprofitable and that now . . . Haralambus is in trouble. And I have an opportunity here . . . to check [Haralambus‘] credibility to see whether or not what he‘s saying to the court is credible.” The court suggested that Haralambus answer the following question: “Out of all the shareholders and investors that you have that you wanted to consolidate into this holding company, has everybody signed agreements to do so, but the two people sitting in the courtroom?” To which Haralambus answered in the negative. The court then asked: “So, it would be fair to say that the failure to consolidate everything into this holding company and the impact that it‘s had on the business isn‘t solely the result of these two people in this courtroom?” Haralambus answered: “That may well be so, Your Honor.” The defendant‘s counsel informed the court that he wanted to know how many companies voted against consolidation into a holding company and which ones. Haralambus explained that those questions place him in a difficult position in which he is “losing the ability to defend myself and those companies from legal assault.” The defendant‘s counsel agreed to address the question of the confidentiality agreement at a later date.
At his next court appearance, Haralambus was represented by counsel. Haralambus’ counsel requested that the court conduct an in camera review of the confidentiality agreement. The court did so. The defendant‘s counsel again stated that he wanted to question Haralambus
The defendant argues that “[b]eyond the parties themselves, there is no witness more central to the financial shenanigans in this case than . . . Haralambus. . . . The plaintiff offered the testimony of Haralambus to shift blame for the defendant‘s loss of her investment away from Haralambus’ and the plaintiff‘s financial shenanigans and onto the defendant for refusing to participate in the consolidation or ‘roll up’ of the individual companies into a single holding company, which allegedly would have enhanced the overall value of the companies. . . . Haralambus testified on direct examination that all of the investors had agreed to the consolidation of the cosmetic companies into a holding company except the defendant, and that her refusal was responsible for the lack of financial success of the3
“In determining whether a defendant‘s right of cross-examination has been unduly restricted, we consider the nature of the excluded inquiry, whether the field of inquiry was adequately covered by other questions that were allowed, and the overall quality of the cross-examination viewed in relation to the issues actually litigated at trial. . . . Although it is axiomаtic that the scope of cross-examination generally rests within the discretion of the trial court, [t]he denial of all meaningful cross-examination into a legitimate inquiry constitutes an abuse of discretion.” (Internal quotation marks omitted.) Corriveau v. Corriveau, 126 Conn. App. 231, 236–37, 11 A.3d 176, cert. denied, 300 Conn. 940, 17 A.3d 476 (2011).
The court did not abuse its discretion in not permitting inquiry into the identity of other investors in the California cosmetics companies venture. Testimony was elicited from Haralambus that there were persons or entities other than the parties that did not agree to consolidate, and Haralambus agreed that it “may well be” that the failure to consolidate was not solely the result of the parties’ actions. The identity of the other investors that were not in favor of consolidation was not material to the issue of the defendant‘s claim of financial misconduct on the part of the plaintiff or to any impeachment of the witness. Furthermore, the cross-examination of Haralambus was extensive and is reported on more than 150 pages of transcript. It covered a variety of issues involving the “roll up” and other financial aspects of the California cosmetics companies
II
The defendant next claims that the court erred by not ordering the plaintiff to repay $500,000 that she had transferred to him. We disagree.
“We review financial awards in dissolution actions under an abuse of discretion standard. . . . In order to conclude that the trial court abused its discretion, we must find that the court either incorrectly applied the law or could not reasonably conclude as it did. . . . In making those determinations, we allow evеry reasonable presumption . . . in favor of the correctness of [the trial court‘s] action.” (Internal quotation marks omitted.) Loughlin v. Loughlin, 93 Conn. App. 618, 624, 889 A.2d 902, aff‘d, 280 Conn. 632, 910 A.2d 963 (2006).
The court found that the plaintiff began investing in the California cosmetics companies in August, 2008, and that most of the money had been transferred from the plaintiff‘s checking account. The court found that two sources of the deposits into the plaintiff‘s checking account, in turn, were wire transfers from the defendant‘s UBS account in the amount of $250,000 each. The court did not find any basis for the defendant‘s claim that she made investments in the California cоsmetics companies because of fraud, duress or undue influence on the part of the plaintiff. The court emphasized that both parties had been warned that the investments were risky and that neither had realized a return
The defendant claims that she did not authorize the wire transfers into the plaintiff‘s account and that, “[i]n a calculated and convoluted manner,” the $500,000 was transferred thrоugh various companies and ended up in the hands of Haralambus. She concludes that “[t]he plaintiff was clearly double dealing with Haralambus to the disadvantage of the defendant . . . Haralambus got his money, the plaintiff got his investment and [the defendant] lost her money.”
The defendant‘s interpretation of events was not what was found by the trial court. The court‘s finding that the $500,000 was part of the defendant‘s knowing investment in the California cosmetics companies venture was not clearly erroneous.5 See, e.g., Miller v. Guimaraes, 78 Conn. App. 760, 766–67, 829 A.2d 422 (2003) (trial court‘s factual findings reviewed under clearly erroneous standard). The court did nоt abuse its discretion in declining to award to the plaintiff the $500,000 that she had invested in a business venture.
III
Prior to the trial in this action, the defendant had initiated a separate action against the plaintiff, Preferred Display and others. She claimed to have been harmed by essentially the same financial transactions that were subjects of dispute in the present action. The defendant claims, in this appeal, that the court erred in ordering her to release the plaintiff and to hold him
The question сentral to the resolution of this issue is whether the pending civil action is “property” subject to distribution under
The trial court stated that it had “examined the civil suit filed by the defendant against the plaintiff, [Preferred Display] and numerous others. The allegations raised against the plaintiff and [Preferred Display] are more specific and detailed but essentially the same allegations raised by the defendant in the dissolution action.”6 The court determined that pursuant to Lopiano, the civil action was an asset that the court could properly сonsider in the mosaic of its property division. The court ordered that “[t]he defendant shall release and hold the plaintiff and his company [Preferred Display] indemnified and harmless from any and all claims of action pending in Hartford Superior Court captioned Perricone v. Rousseau, bearing docket number HHD-CV-11-6027402-S. In addition, the defendant shall be
In Lopiano v. Lopiano, supra, 247 Conn. 363, our Supreme Court held that a personal injury award is a property interest encompassed within the meaning of “property” under
The cause of action in Perricone v. Rousseau, supra, Superior Court, Docket No. CV-11-6027402-S, is “property” for the purpose of
As discussed previously, Lopiano mandates a three stage inquiry. The first issue is whether the item in question is properly characterized as property. If it is property, the next issues are valuation and equitable distribution. The remaining issues are easily resolved. In the present case, the court had no need to resolve the issue of valuation, because no proceeds of the civil action could flow directly or indirectly from the plaintiff to the defendant pursuant to the court‘s order. If, on the other hand, the defendant should recover any proceeds independently from any defendant other than the plaintiff or Preferred Display in the civil action, she would be entitled to keep for herself all of those assets. Similarly, the court did not abuse its discretion in the distribution of the proceeds of the right of action. Anything the defendant could recover from third parties was hers; nothing was to come from the plaintiff and he was to be made whole for any future litigation costs regarding the civil action. In light of the court‘s determination that there had been no financial manipulation, which finding is not clearly erroneous, the order regarding the civil case was well within the court‘s discretion and
Finally, the defendant argues that even if the pending civil action was property for purposes of
IV
The defendant last claims that the court erred in imposing a sanction of $25,000 in attorney‘s fees for a discovery violation that was allegedly committed by her attorney. The defendant argues that (1) the court‘s finding of a discovery violation on the part of her attorney was clearly erroneous; (2) even if that finding was not clearly erroneous, the court erred in imposing a sanction on the defendant because of the alleged conduct of her attorney in not producing a computer disc to the plaintiff; and (3) the $25,000 sanction imposed had no basis in the evidence. We disagree.
“[T]he common law rule in Connecticut, also known as the American Rule, is that attorney‘s fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent a contractual or statutory exception.” (Internal quotation marks omitted.) Berzins v. Berzins, 306 Conn. 651, 657, 51 A.3d 941 (2012). One limited exception to that rule in dissolution actions “provide[s] a trial court with the discretion to award
The court noted that the plaintiff began requesting discovery from the defendant in 2011, and that the court entered discovery orders in March, June, July and September, 2011. The court found that the defendant failed to comply with these court orders, in that attorney billing records and certain bank records were not fully produced. The court noted that the defendant‘s attorney had testified that a UBS computer disc containing financial records was not produced because, even though the requested material had been clearly described, the attorney did not think that it contained material that the plaintiff wanted. The court stated that “[i]t is not up to the defendant to decide what information is relevant to the preparation of the plaintiff‘s case.” In September, 2011, a fine of $50 per day, doubling daily, was imposed on the defendant for noncompliance. The trial court noted that because the orders were never fully complied with through the end of the trial, the sanctiоn would be more than the defendant‘s net worth. The court found that the defendant had had the ability to comply with the court orders regarding discovery, that the defendant and her lawyers were fully aware of the orders, and that they wilfully failed to comply with them. The court imposed a sanction of $25,000 on the
First, the defendant argues that the court erred in finding that her prior attorney, Carlo Forzani, committed a discovery violation. In support of her argument, she cites the testimony of Forzani and argues that, once Forzani was aware that the plaintiff wanted the UBS computer disc, he provided it to him. Although the court, as trier of fact, can reject any portion of testimony it deems not credible; see Jay v. A & A Ventures, LLC, 118 Conn. App. 506, 514, 984 A.2d 784 (2009); Forzani‘s testimony was not necessarily inconsistent with the court‘s finding that some documents were not produced in a timely fashion after the court had ordered them to be produced. Additionally, some documents were never produced despite the fact that they were available. In the portion of testimony cited by the defendant, Forzani stated that it never occurred to him to give the plaintiff the UBS computer disc, and, after the court ordered him to do so, hе encountered a delay because “Staples didn‘t want to do all this work.” Further, the defendant contests only the court‘s finding of a discovery violation with respect to the UBS computer disc, but apparently does not contest the finding with respect to the attorney billing records, Citizen Bank records, and Valley Bank records, which the court also determined were not fully produced despite the court‘s clear order. Accordingly, we conclude that the court‘s finding of a discovery violation was not clearly erroneous.
Second, the defendant argues that, even if the court‘s finding of a violation was not erroneous, the violation was not attributable to her and “[t]he trial court expressly found that Attorney Forzani, not the defendant, decided not to produce the computer disc to the plaintiff.” (Emphasis in original.) The court‘s finding of a violation did not rest solely on the issue of the UBS
Third, the defendant argues that “the $25,000 sanction appears to be a number that the court pulled out of the air.” “A trial court may rely on its own general knowledge of the trial itself to supply evidence in support of an award of attorney‘s fees. . . . The amount of attorney‘s fees to be awarded rests in the sound discretion of the trial court and will not be disturbed on appeal unlеss the trial court has abused its discretion. . . . Sound discretion, by definition, means a discretion that is not exercised arbitrarily or wilfully, but with regard to what is right and equitable under the circumstances and the law . . . .” (Citation omitted; internal quotation marks omitted.) Food Studio, Inc. v. Fabiola‘s, 56 Conn. App. 858, 865, 747 A.2d 7 (2000).
The court was familiar with the history of the case and the extent of attorney activity. In its discussion of the sanction for discovery abuse, the court referenced attorney‘s fees in the amount of $25,553.91 for dealing with the defendant‘s incomplete financial records. We hold that, in the circumstances of this case, a sanction in the amount of $25,000 was reasonable. The court did not abuse its discretion in setting the amount of the sanction.
The judgment is affirmed.
In this opinion the other judges concurred.