McKeon v. Lennon

321 Conn. 323

138 A.3d 242

Maria F. McKEON

v.William P. LENNON.

No. 19470.

Supreme Court of Connecticut.

Argued Jan. 27, 2016.

Decided May 17, 2016.

Campbell D. Barrett, with whom were Jon T. Kukucka and, on the brief, Johanna S. Katz, Hartford, for the appellant (plaintiff).

Debra C. Ruel, with whom were Anne C. Dranginis and James M. Ruel, for the appellee (defendant).

Giovanna Shay, Lucy Potter, Hartford, Anne Louise Blanchard, Shelley White and Steve Dembo filed a brief for Greater Hartford Legal Aid et al. as amici curiae.

Louise Truax, Fairfield, and Leslie Jennings–Lax filed a brief for the American Academy of Matrimonial Lawyers, Connecticut Chapter, as amicus curiae.

Samuel V. Schoonmaker IV and Wendy Dunne DiChristina filed a brief for the Connecticut Bar Association as amicus curiae.

ROGERS, C.J., and PALMER, ZARELLA, EVELEIGH, ESPINOSA and VERTEFEUILLE, Js.

ZARELLA, J.

In this certified appeal, we address two important issues relating to child support orders. The first issue is whether the Appellate Court properly concluded, based on this court's reasoning with respect to the modification of alimony orders in Dan v. Dan, 315 Conn. 1, 10, 105 A.3d 118 (2014), that the supported party must show circumstances beyond the increased income of the supporting party to establish the substantial change in circumstances required to justify the modification of a child support order under General Statutes § 46b–86 (a). The second issue is whether the trial court should consider exercised stock options, restricted stock and employment perquisites in calculating the supporting party's gross income to determine whether there has been a substantial change in circumstances under § 46b–86 (a). The plaintiff, Maria F. McKeon, claims that the Appellate Court, in affirming the trial court's denial of her two separate motions to modify the original child support order, incorrectly concluded that alimony and child support orders are subject to the same modification requirements under § 46b–86 (a), and, therefore, the court improperly applied the reasoning in Dan when denying her motions. See McKeon v. Lennon, 155 Conn.App. 423, 434, 109 A.3d 986 (2015). The plaintiff also claims that the Appellate Court incorrectly concluded that the trial court had not abused its discretion in declining to consider income from stock options, restricted stock and employment perquisites received by the defendant, William P. Lennon, as part of his executive compensation package when calculating the defendant's gross income for the purpose of determining whether there had been a substantial change in his financial circumstances following the dissolution of the parties' marriage. See id., at 440, 441, 109 A.3d 986. The plaintiff thus seeks reversal of the Appellate Court's judgment and a remand to the trial court to consider these sources of income in deciding the plaintiff's motions. The defendant agrees with the plaintiff that the Appellate Court's reliance on the reasoning in Dan was improper but characterizes that reliance as dictum. He also argues that the trial court properly calculated his gross income without considering his stock benefits and employment perquisites, and, therefore, the Appellate Court properly upheld the trial court's conclusion that the plaintiff did not establish the substantial change in circumstances required for the granting of her motions. We reverse in part the judgment of the Appellate Court.

The following relevant facts are set forth in the Appellate Court's opinion. “[This appeal] arise[s] from a series of postjudgment motions related to the parties' 2007 dissolution of marriage. The plaintiff and [the] defendant were married on August 29, 1981. During their twenty-six year marriage, the parties had three children. In 2005, the plaintiff initiated an action for dissolution of marriage. On December 31, 2007, the court rendered judgment dissolving the marriage ... and entered various orders.

“In the dissolution judgment, the court made several relevant factual findings. The court found that the defendant was a vice president at Electric Boat [Corporation], earning a base salary of $225,420, an annual bonus, stock options, restricted stock awards, and a pension. The court found that the plaintiff was a highly skilled and capable corporate attorney, who in the past had sometimes earned in excess of the defendant's salary. In the years leading up to the divorce, the plaintiff had worked part-time in order to be the primary caregiver to their three children. Despite working part-time, she had been able to earn gross income of $78,500 from mid-July, 2007, through December 12, 2007.

“The court issued various orders in connection with the dissolution judgment, including child custody, division of assets of the marriage, and alimony and child support. First, the dissolution judgment set out a parenting plan regarding the parties' two minor children. The parties were to share joint legal custody of the children, but the plaintiff's home would serve as the children's primary residence. Next, the dissolution judgment ordered the defendant to pay the plaintiff $439 per week in child support for the parties' two minor children. The dissolution judgment also ordered the parties to each pay 50 percent of the cost of the children's child care, their after school care and transportation, and their private school tuition. The judgment ordered the parties to share all costs over $150 for the children's extracurricular activities, while the plaintiff was ordered to pay for all costs under $150.

“The dissolution judgment also awarded alimony to the plaintiff in the amount of $900 per week for a period of fourteen years. This order was modifiable, but not terminable, upon the plaintiff's remarriage or cohabitation. [In addition] [t]he court awarded the plaintiff ... [an irrevocable 50 percent interest in all stock options awarded, granted or otherwise credited to the defendant as of the date of dissolution and] an irrevocable interest in the defendant's future annual employment bonuses, executive stock options, and awards of restricted stock. [Specifically] [t]he plaintiff was to receive 50 percent of the defendant's bonuses, stock options, and restricted stock awarded in 2008, 2009, and 2010.

The plaintiff was to then receive 40 percent of the defendant's bonuses [future stock options, and restricted stock awarded] in 2011, 2012, and 2013, and ... 30 percent [of the defendant's bonuses, future stock options, and restricted stock] awarded to him in each year from 2014 through 2021. [The trial court added in its memorandum of decision issued in connection with the dissolution judgment that ‘[a]ll stock options that have been awarded, granted or otherwise credited to the defendant prior to the dissolution of marriage shall be divided as part of the property settlement and shall not be alimony or child support.’]

“In May, 2008, [less] than six months after the dissolution judgment was rendered, the plaintiff filed a motion for modification in which she requested, inter alia, that child support be raised from $439 per week to $1700 per week. On June 10, 2008, the court denied the motion without a hearing. From that [ruling], the plaintiff appealed to [the Appellate] [C]ourt, which heard argument on the matter on November 18, 2010. [See] McKeon v. Lennon, 131 Conn.App. 585, 27 A.3d 436, cert. denied, 303 Conn. 901, 31 A.3d 1178 (2011). On appeal, [the Appellate] [C]ourt concluded that the trial court improperly [had] denied the plaintiff's motion without first conducting a hearing, and, therefore ... reversed the judgment and remanded the matter to the trial court for further proceedings. Id., at 599–600, [613–14, 27 A.3d 436 ]....

“While the appeal of the 2008 motion for modification was pending before [the Appellate] [C]ourt, the plaintiff filed another motion for modification of child support with the trial court on April 22, 2010. The plaintiff's motion requested the court to increase the defendant's child support obligation in light of the plaintiff's increased expenses, her decreased net income, and the defendant's increased income since the dissolution judgment. On July 14, 2010, the defendant filed his own motion for modification of child support on the basis that one of their two minor children had turned eighteen years old and had graduated [from] high school. The court scheduled a hearing on both motions in May, 2011.

“On May 25, May 26, and June 1, 2011, the trial court held a contested hearing on the plaintiff's and the defendant's motions for modification. On October 20, 2011, the court ... [granted] the defendant's 2010 motion for modification and den[ied] the plaintiff's 2010 motion for modification. The court ordered the defendant's child support obligation to be reduced from $439 per week to $400 per week. This modification reflected the change from support for two minor children, to support for only one minor child. From [these rulings], the plaintiff appealed....

“On April 25, 2012, pursuant to [the Appellate] [C]ourt's remand, the trial court held a contested hearing on the plaintiff's 2008 motion for modification. Prior to the hearing, the plaintiff had also filed a motion for attorney's fees and a motion for contempt. At the hearing, the parties presented evidence on all three motions. As a result of the complicated procedural history of this case, the court was required to determine whether it could consider all changes in circumstances since the 2007 dissolution judgment, or whether it was limited to looking back to only 2011, when the court ruled on the 2010 motions for modification.

“In November, 2012, the court issued its memorandum of decision, denying the plaintiff's motion for modification of child support, motion for attorney's fees, and motion for contempt. In doing so, the court considered the circumstances of the parties going back to the 2007 dissolution judgment [through April 25, 2012]. Further, the court...