Welsh v. William

D'ANNA WELSH v. WILLIAM V. MARTINEZ

AC 41115

COURT OF APPEALS OF THE STATE OF CONNECTICUT

Argued February 4, 2019

August 20, 2019

Lavine, Prescott and Elgo, Js.

Syllabus

The defendant, W, appeals from the judgment of the trial court holding him in contempt for violating the terms of an asset standstill order. The plaintiff had brought an action against W seeking to recover damages for, inter alia, tortious invasion of privacy. The matter was tried to a jury, which returned a verdict in favor of the plaintiff in the amount of $2 million, and the court awarded punitive damages in the amount of $360,000. Thereafter, the court ordered that W was enjoined from voluntarily transferring or encumbering any assets except business assets in the ordinary course of business and personal assets for ordinary living expenses, including court-ordered alimony and child support, and also granted the plaintiff's application for a prejudgment remedy. The plaintiff subsequently filed a motion for contempt alleging that W transferred more than $2 million to his then-wife, C, by depositing all of his wages directly into her bank account for the purpose of defeating the asset standstill order. The trial court granted the motion for contempt and imposed a compensatory fine of $2.2 million payable to the plaintiff in the amount of $25,000 per month. From the judgment rendered thereon, W appealed to this court. Held:

1. W's claim that the trial court improperly found him in contempt because the asset standstill order lacked sufficient clarity and was ambiguous was unavailing: the plain language of the order prohibited W from depositing the entirety of his income to C's bank account over several years, after his own bank account into which his wages previously were deposited was frozen, for the purpose of shielding those assets from the reach of a judgment creditor, the asset standstill order provided sufficient notice to a reasonable person that the wholesale transfer of wages to the account of a third party was not permitted, and evidence in the record supported the court's determination that W wilfully had violated the order, including evidence that C's bank account was opened for the express purpose of placing the entirety of W's wages outside the reach of a judgment creditor; accordingly, the trial court did not abuse its discretion in holding W in contempt.

2. W could not prevail in his claim that the trial court failed to consider his ability to pay in imposing a compensatory fine: that court found that W had sufficient income and other assets that rendered him financially able to pay the monthly amount ordered, and that finding was substantiated by evidence in the record, which included W's testimony that he earned a gross annual income of $1.2 million and that he had no other long-term debt aside from monthly mortgage payments and certain divorce related obligations, and statements from individual retirement accounts held by W were admitted into evidence as full exhibits, and, therefore, the court reasonably could have concluded that W had not proven a financial incapacity to comply with its fine, and its finding that W possessed sufficient income and other assets to pay that fine was not clearly erroneous.

3. Although the trial court properly concluded that the plaintiff was harmed by W's contemptuous conduct, the court abused its discretion in imposing a compensatory fine without the necessary factual basis: even though the court properly found that the principal loss sustained by the plaintiff was the inability to employ statutory collection procedures against W, including the remedy of attachment as to the $2,220,400.67 in wages that W deposited into C's bank account, compensatory fines must be confined to actual losses sustained as a result of noncompliance with a court order, the ability to attach an asset is distinct from the ability to execute on an attachment to satisfy an outstanding judgment, and the court failed to furnish an adequate factual basis to support its determination that the plaintiff had proven $2.2 million in actual pecuniary losses, as an attachment merely provides security for a judgment creditor, who may execute on the attachment depending on a number of factors, including the extent to which the judgment has been satisfied and the existence of other attachments on the assets of the judgment debtor, the court made no findings, apart from finding that the plaintiff's ability to attach such assets was impaired, to provide the requisite factual basis for its compensatory fine and, in the absence of such findings, could not ensure that the fine was confined to actual losses sustained; accordingly, the case was remanded to the trial court for a new hearing limited solely to the issue of damages to determine the measure of loss that occurred as a result of W's contemptuous conduct in violation of the court's order.

Procedural History

Action to recover damages for, inter alia, the defendant's alleged invasion of privacy, and for other relief, brought to the Superior Court in the judicial district of Hartford and tried to the jury before Robaina, J.; verdict and judgment for the plaintiff, from which the defendant appealed to this court, which affirmed the judgment; thereafter, the plaintiff filed a motion to prevent fraudulent transfer of property; subsequently, the court, Graham, J., entered an order enjoining the defendant from transferring certain assets; thereafter, the court, Robaina, J., granted the plaintiff's application for a prejudgment remedy; subsequently, the court, Moll, J., granted the plaintiff's motion for contempt and rendered judgment thereon, from which the defendant appealed to this court; thereafter, the court, Moll, J., denied the defendant's motion for articulation; subsequently, the defendant filed a motion for review with this court, which granted the defendant's motion for review but denied the relief requested. Reversed in part; further proceedings.

Jeffrey J. Mirman, with whom were David A. DeBassio and, on the brief, Thomas J. Farrell, for the appellant (defendant).

Irve J. Goldman, with whom, on the brief, was Timothy G. Ronan, for the appellee (plaintiff).

Opinion

ELGO, J. The defendant, William V. Martinez, Jr.,¹ appeals from the judgment of the trial court holding him in contempt for violating the terms of an asset standstill order. On appeal, the defendant claims that the court improperly (1) found him in contempt because that order lacked sufficient clarity and was ambiguous, (2) failed to consider the defendant's ability to pay in imposing a compensatory fine, and (3) abused its discretion in imposing that fine. We affirm in part and reverse in part the judgment of the trial court.

In 2010, the plaintiff, D'Anna Welsh, commenced a civil action (underlying action) against the defendant, in which she alleged tortious invasion of privacy, negligence per se, intentional infliction of emotional distress, and negligent misrepresentation. At trial, the jury was presented with "undisputed evidence" that the defendant "conducted extensive covert surveillance of the plaintiff over the course of several years. That surveillance included intimate video transmissions from her bedroom and shower, daily reports as to every notation made on her computer, and GPS monitoring of her vehicle. The jury also had before it evidence that although the defendant swore under oath before the [Superior Court] at [an] accelerated rehabilitation hearing . . . that the plaintiff 'had nothing to worry about' and that no further surveillance equipment remained in the plaintiff's home, the transmissions from her bedroom thereafter continued and the defendant continued to receive daily e-mail reports from the spyware on the plaintiff's computer. The jury also was presented with evidence that despite her request for the defendant to leave her alone, he continued to appear unannounced and uninvited at her home. His behavior terrified the plaintiff, particularly when he informed her that 'I can hear you from outside your house.' In addition, the defendant's angry and violent conduct left the plaintiff scared for her life."² Welsh v. Martinez, 157 Conn. App. 223, 241, 114 A.3d 1231, cert. denied, 317 Conn. 922, 118 A.3d 63 (2015). The jury thereafter returned a verdict in favor of the plaintiff on all counts and awarded her $2 million in damages, the propriety of which this court affirmed on appeal. See id., 240-46.

After the jury returned a verdict in her favor, the plaintiff filed a motion with the trial court seeking punitive damages in the amount of her attorney's fees. The trial court, Robaina, J., granted that motion over the defendant's objection and awarded "the sum of $360,000 as punitive damages in favor of the plaintiff."³ As a result, the plaintiff had an outstanding judgment against the defendant in the amount of $2,360,000 as of December, 2012.⁴

On the same day that the jury delivered its verdict, the plaintiff filed two pleadings relevant to this appeal.The first was an application for a prejudgment remedy.⁵ In the second, which was titled "Plaintiff's Motion to Prevent Defendant's Fraudulent Transfer of Property," the plaintiff alleged that she had "a reasonable belief that [the] defendant will attempt to fraudulently transfer property in violation of [the Uniform Fraudulent Transfer Act, General Statutes § 52-552a et seq.]."

On July 9, 2012, the court, Graham, J., held a hearing on the latter motion. At its conclusion, the court entered an order that stated: "The [defendant] is enjoined from voluntarily transferring or encumbering any assets except business assets in the ordinary course of business and personal assets for ordinary living expenses, including court-ordered alimony and child support" (asset standstill order).⁶

Weeks later, on July 31, 2012, Judge Robaina granted the plaintiff's application for a prejudgment remedy. In so doing, the court ordered: "[The] plaintiff is allowed to attach up...