Hendricks v. Haydu

160 Conn.App. 103

124 A.3d 554

Kimberly HENDRICKS

v.Sandor Anthony HAYDU.

No. 36333.

Appellate Court of Connecticut.

Argued May 11, 2015.

Decided Sept. 29, 2015.

Alicia P. Chalumeau, Norwalk, with whom was Melissa A. Brescia, for the appellant (defendant).

Jason P. Gladstone, New Canaan, for the appellee (plaintiff).

Opinion

DiPENTIMA, C.J.

The defendant, Sandor Anthony Haydu, appeals from the judgment of the trial court granting in part the motion for modification of child support filed by the plaintiff, Kimberly Hendricks. On appeal, the defendant claims that the court improperly (1) excluded the plaintiff's bonus income in calculating her gross income when modifying the child support award; (2) failed to deviate from the child support and arrearage guidelines (guidelines); and (3) ordered the defendant to pay the modified child support amount retroactive to the date of service of the plaintiff's motion. We agree with the defendant's first claim, and, accordingly, we reverse in part the judgment of the court.¹

The record reveals the following relevant facts and procedural history. The parties, who never married, have four children together.²On August 17, 2011, the parties entered into a parenting agreement. On November 29, 2011, the court, Malone, J.,rendered judgment ordering the defendant to pay $95 per week in child support. On August 22, 2012, the plaintiff filed a motion for modification seeking, inter alia, an increase in child support due to the defendant's change in employment status. The court, S. Richards, J.,heard testimony on April 11, May 7, and June 5, 2013, from both parties, as well as the defendant's witness, James Pierson, vice president for corporate human resources at Hexcel Corporation (Hexcel).

At trial, the defendant introduced four exhibits relevant to the issues on appeal: (1) the plaintiff's employment offer letter from Hexcel; (2) the plaintiff's 2012 earnings summary; (3) the plaintiff's 2013 earnings summary through March 31, 2013; and (4) the plaintiff's participant statement showing whether stock options had vested or would vest in the future.

The offer letter provided that the plaintiff could participate in Hexcel's deferred compensation plan, which consisted of a qualified 401(k) component and a non-qualified component. In this plan, the plaintiff could elect to defer receiving part of her base salary and annual bonus. The offer letter also explained that Hexcel provided the plaintiff with two bonus plans. The management incentive compensation plan (MICP) was a cash bonus plan consisting of a “target cash incentive equal to 40% of [the plaintiff's] annual base salary.” The long-term incentive plan (LTIP) was an equity bonus compensation plan consisting of stock options. The compensation range for this plan was between 44 percent to 66 percent of the plaintiff's “then-current base pay....” It paid out the LTIP in two forms of stock options, namely, restricted stock units (RSU) and performance restricted stock units (PRSU). Hexcel granted the RSU on the basis of how long the plaintiff continued employment with the company. The PRSU was a performance based stock bonus that would only be awarded if the performance criteria were met.

The 2012 earnings summary showed that the plaintiff was compensated with her base salary, that she was awarded her MICP cash bonus, and that she deferred approximately $25,000 into the deferred compensation plan. The 2012 earnings summary revealed that the plaintiff was awarded RSUs but was not awarded PRSUs. The plaintiff's 2013 earnings summary indicated that she received the annual MICP and LTIP bonuses. It also showed that she deferred approximately $100,000 into the deferred compensation plan. Finally, the plaintiff's participant statement indicated the potential income of her stock options. It reflected that thousands of various stock options would vest through 2015.³

While explaining the RSU, Pierson testified that the plaintiff's 2012 earnings summary deduction column contained an entry that reflected “taxes that [were] taken from the [RSU] incomethat [was] received.” (Emphasis added.) Also, when questioned about the “categories of income that [the plaintiff] receive[d] in addition to the base [salary],” Pierson testified that she received the MICP, LTIP, and deferred compensation. Moreover, in describing the RSU and PRSU, Pierson acknowledged that “[t]hose shares have an obvious economic value... which we calculate and it becomes W–2 income.” (Emphasis added.) However, regarding the nonqualified component of the deferred compensation plan, Pierson explained that once the plaintiff deferred money from either her base salary or annual bonus into the nonqualified component of the plan, it became “an asset of the company.”⁴

Although the plaintiff's bonuses were not guaranteed, she had received her MICP cash bonus every year of her employment and Pierson believed that the MICP and LTIP bonuses were in all “likelihood ... [to] continue into the future.” Indeed, Pierson testified that there was no “way to determine ... the future of those potential payouts.” Reinforcing the fact that the bonuses were not guaranteed, the plaintiff testified that in 2012 Hexcel changed its bonus structure making it “more difficult to receive the higher bonuses.”⁵

On November 14, 2013, the court issued its memorandum of decision.⁶The court found that the plaintiff was employed by Hexcel since September, 2009, with a current annual base salary of $274,735. The court also found that “the plaintiff ha[d] the potential to receive ... two types of bonuses,” one type in the form of a cash bonus and the other type in the form of stock options that “vest over several years and are valued as of the date of vesting.” As to the defendant, the court found that he was unemployed from September, 2011 to April, 2012, when he was hired as a controller in a New York City bakery. His annual salary was $85,000.

Pursuant to § 46b–215a–1 et seq. of the Regulations of Connecticut State Agencies, both parties submitted worksheets calculating their respective support obligations. The court rejected the parties' worksheets and prepared its own worksheet “based on the actual income figures of the parties as set forth in their respective financial affidavits....”⁷Without expressly finding the gross income for either party, the court calculated the plaintiff's net weekly income to be $3402 and the defendant's to be $1090. The parties' combined net weekly income, then, was $4492, of which 75.73 percent was attributed to the plaintiff and 24.27 percent was attributed to the defendant.⁸Pursuant to the guidelines, the court found the presumptive minimum child support obligation to be $686 per week. See Fox v. Fox,152 Conn.App. 611, 623, 99 A.3d 1206, cert. denied, 314 Conn. 945, 103 A.3d 977 (2014). Thereafter, the court ordered the defendant to pay $166 per week in child support, i.e., his 24.27 percent share of the total support. The court also ordered, inter alia, the child support payment retroactive to the date of the plaintiff's service of the motion. This appeal followed.

On appeal, the defendant claims that the court erred in calculating the plaintiffs gross income. Specifically, he argues that the court erred by not “recogniz[ing] the evidence adduced at trial showing that the plaintiff received [a bonus] award for every year of her employment....” We agree.

We first set forth the standard of review and applicable law governing the defendant's claim. “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.... Notwithstanding the great deference accorded ... a trial court's ruling ... may be reversed if, in the exercise of its discretion, the trial court applies the wrong standard of law.” (Internal quotation marks omitted.) Misthopoulos v. Misthopoulos,297 Conn. 358, 372, 999 A.2d 721 (2010).

“[General Statutes § ] 46b–86 governs the modification or termination of ... [a] support order after the date of ... judgment.... [T]he applicable provision of the statute is § 46b–86 (a), which provides that a final order for ... [child support] may be modified by the trial court upon a showing of a substantial change in the circumstances of either party....

“Once a trial court determines that there has been a substantial change in the financial circumstances of one of the parties, the same criteria that determine an initial award of ... support are relevant to the question of modification.... More specifically, these criteria, as outlined in General Statutes § [48b–84], require the court to consider the needs and financial resources of each of the parties and their children....

“Thus, [w]hen presented with a motion for modification, a court must first determine whether there has been a substantial change in the financial circumstances of one or both of the parties.... Second, if the court finds a substantial change in circumstances, it may properly consider the motion and, on the basis of the § [46b–84] criteria, make an order for modification.” (Internal quotation marks omitted; footnotes omitted.) Fox v. Fox,supra, 152 Conn.App. at 619–21, 99 A.3d 1206.

In a child support proceeding, the court must fashion its initial financial orders in accordance with criteria contained in § 46b–84 (d).⁹See also Bartel v. Bartel,98 Conn.App. 706, 711, 911 A.2d 1134 (2006)(acknowledging that § 46b–84 (d)“require[s] consideration of the parties' ‘amount and sources of income’ in determining the appropriate ... size of any child support ... award”). The legislature also created a commission to “issue child support and arrearage guidelines to ensure the appropriateness of criteria for the...