Bialik v. Bialik

215 Conn.App. 559

283 A.3d 1062

Jodi BIALIK

v.Scott BIALIK

AC 44699

Appellate Court of Connecticut.

Argued May 12, 2022

Officially Released October 4, 2022

Christopher P. Norris, for the appellant (plaintiff).

Laura A. Goldstein, with whom was Eva M. DeFranco, Danbury, for the appellee (defendant).

Alvord, Clark and Seeley, Js.

ALVORD, J.

The plaintiff, Jodi Bialik, appeals from the postjudgment ruling of the trial court granting the motion of the defendant, Scott Bialik, for a modification of his alimony obligation. On appeal, the plaintiff claims that the court erred in (1) failing to consider the impact of funds received by the defendant's dental practice from the federal Paycheck Protection Program (PPP); see 15 U.S.C. § 636 (a) (36) ; and the Economic Injury Disaster Loan (EIDL) program; see 15 U.S.C. § 636 (b) (2) ; both of which are administered by the United States Small Business Administration (SBA), in calculating the defendant's annual adjusted gross earnings, as defined in the parties’ separation agreement, and (2) its treatment of disability insurance premiums paid by the defendant's business.¹ We agree with the plaintiff and, accordingly, reverse in part the judgment of the trial court.

The following facts and procedural history are relevant to our review of the plaintiff's claims. The court, Winslow, J ., dissolved the parties’ marriage on December 14, 2016. At the time of the dissolution, the parties had two minor children, aged fifteen and twelve. The judgment of dissolution incorporated by reference the parties’ separation agreement (agreement). With respect to alimony, the defendant was obligated to pay the plaintiff $2769.23 per week "until the first of the following to occur: either party's death, the [plaintiff's] remarriage, or ten (10) years from the dissolution of marriage." The parties agreed that alimony was "nonmodifiable as to an extension of the term."

Pursuant to Section 20 (C) of the agreement, the amount of alimony paid by the defendant to the plaintiff is "nonmodifiable downward unless the [defendant] earns less than ... $350,000 ... annual adjusted gross earnings. If the [defendant] earns less than ... $350,000 ... annual adjusted gross earnings, then the amount of alimony may be modifiable if a court of competent jurisdiction so determines, based on a motion for modification properly filed and proceeded upon."

Section 20 of the agreement defines "adjusted gross earnings" as "gross business receipts less business expenses, less straight-line depreciation of business equipment; with add-backs for the following: travel and entertainment expenses of $5,000.00 per year; advertising expenses in excess of $5,000.00 per year; any charitable contributions, owner's percentage of profit sharing; medical insurance of owner, attorney and accounting fees in excess of $15,000.00 per year, but not including professional fees paid in connection with insurance, tax or Medicaid audits; dues and subscriptions in excess of $3,600.00; auto expenses in excess of $6,000.00; auto depreciation; home office rent or expenses; equipment for personal use; and any W-2 gross income paid to the owner."

The agreement also included safe harbor provisions, pursuant to which the plaintiff could earn up to $50,000 gross employment earnings annually, and the defendant could earn up to $700,000 "adjusted gross earnings annually," without either being deemed a substantial change in circumstances. (Internal quotation marks omitted.) The agreement stated that "[o]nly those sums which exceed the ‘safe harbor’ amount shall be considered in any proceeding for a modification of alimony, if the claim is an increase in ... earnings. This ‘safe harbor’ amount and its term may be modified by a court of competent jurisdiction."

On March 22, 2018, the defendant filed a motion to modify his alimony obligation, in which he alleged, inter alia, that his "income ha[d] substantially decreased, which amount[ed] to a substantial change in circumstances." On October 1, 2018, the parties entered into a stipulated agreement, which provides in relevant part: "There shall be no modification of alimony at this time. It is agreed by the parties that if either party ever brings this matter back to court to address a change in alimony, the income of the parties to be considered shall be the incomes from date of dissolution and the then income of the parties when the motion is filed and/or addressed."²

On June 2, 2020, the plaintiff filed a motion for contempt in which she alleged that, beginning in March, 2020, the defendant unilaterally had reduced the amount of alimony he paid to her. She alleged, inter alia, that the defendant was $17,879.80 in arrears on his alimony payments.

On July 15, 2020, the defendant filed a motion to modify his alimony obligation, alleging that his annual income had decreased substantially and was less than $350,000. He represented, inter alia, that, "[d]ue to the unforeseeable COVID-19 pandemic, the defendant was forced to completely shutter his offices for months, resulting in little or no income. After the defendant was permitted to reopen, the number of patients has decreased significantly."

On January 8, 2021, the plaintiff filed a second motion for contempt, in which she represented that the defendant had refused to pay the previous arrearage "until days prior to the hearing on a contempt motion addressing that arrearage." She alleged that the defendant again was failing to pay his periodic alimony obligation and "has unilaterally determined he doesn't need to pay for [two] weeks."

The court, Truglia, J ., held an evidentiary hearing on the defendant's motion for modification and the plaintiff's two motions for contempt in April, 2021.³ The defendant presented the testimony of Frederick Landwehr, a certified public accountant and financial advisor who prepares the defendant's tax returns and financial statements. The plaintiff presented the testimony of Theodore Lanzaro, a certified public accountant and certified forensic accountant. Both parties also testified.

On April 12, 2021, the defendant filed revised proposed orders in which he requested that the court reduce his alimony obligation to $1038 per week and that the modification be made retroactive to the date of service of his motion for modification, August 8, 2020.

On April 20, 2021, the court issued its memorandum of decision. The court first found that the defendant had demonstrated a substantial change in circumstances in that his income from his business "ha[d] declined steadily since December, 2016." The court "accept[ed] the figures offered by the defendant" and found that he had annual adjusted gross earnings of $240,123 in 2020. The court next turned to the factors set forth in General Statutes § 46b-82 (a) and determined that "an alimony payment of $2769.23 per week represents an unreasonable portion of the defendant's current earnings."⁴ The court reduced the defendant's weekly alimony obligation to $1038, as requested by the defendant in his revised proposed orders, and made its order retroactive to the date of service of the defendant's motion for modification, which was August 8, 2020. Applying the retroactive effective date, the court determined that the defendant had overpaid alimony in the amount of $34,853 and ordered the plaintiff to reimburse the defendant for the overpayment on or before June 1, 2021.

Considering the motions for contempt, the court determined "that the plaintiff has not carried her burden of proof by clear and convincing evidence that the defendant has wilfully violated the court's clear orders regarding payment of alimony." The court found that the defendant was "unable to comply with the [alimony] order after he was ordered to close his office in March, 2020, and again in December, 2020." The court additionally found "that the defendant acted in good faith at all times in his dealings with the plaintiff."⁵

On April 27, 2021, the plaintiff filed a motion to reargue, which was denied. Thereafter, the plaintiff filed a motion for articulation, asking the court to articulate its findings concerning the PPP and EIDL funds and disability insurance premiums paid as an expense of the defendant's business. The court denied the motion for articulation.⁶ This appeal followed.⁷

We first set forth principles of law relevant to the plaintiff's claims. "[ General Statutes §] 46b-86 governs the modification or termination of an alimony or support order after the date of a dissolution judgment. When ... the disputed issue is alimony ... the applicable provision of the statute is § 46b-86 (a), which provides that a final order for alimony may be modified by the trial court upon a showing of a substantial change in the circumstances of either party." (Internal quotation marks omitted.) Birkhold v. Birkhold , 343 Conn. 786, 809, 276 A.3d 414 (2022). "Under that statutory provision, the party seeking the modification bears the burden of demonstrating that such a change has occurred. ... To obtain a modification, the moving party must demonstrate that circumstances have changed since the last court order such that it would be unjust or inequitable to hold either party to it. Because the establishment of changed circumstances is a condition precedent to a party's relief, it is pertinent for the trial court to inquire as to what, if any, new circumstance warrants a modification of the existing order." (Internal quotation marks omitted.) Malpeso v. Malpeso , 189 Conn. App. 486, 499, 207 A.3d 1085 (2019).

Prior to addressing the plaintiff's claims, we note that the plaintiff does not claim on appeal that the defendant did not meet the agreement's $350,000 threshold for proceeding with a motion for modification. Additionally, both parties acknowledge that the safe harbor provisions contained in the agreement do not relieve the party seeking modification of the statutorily mandated burden of demonstrating a substantial change in...