Opinion
No. FA05 400 94 03 S
November 6, 2006
MEMORANDUM OF DECISION
The plaintiff, Jonathan Tanzman, and the defendant, Margaret E. Meurer, were married on March 27, 1993. There are three minor children issue of the marriage, Conor M. Tanzman born February 1, 1994, Riley O. Tanzman born August 24, 1995, and Addie E. Tanzman born November 7, 1999. The marriage has broken down irretrievably and dissolution is granted. The marriage was of approximately 11 years duration. Ms. Meurer is presently 40 and Mr. Tanzman is 42. Mr. Tanzman is in excellent health while Ms. Meurer has suffered from Multiple Sclerosis since 1990, a chronic and progressive disease of the central nervous system. There is no consideration of fault regarding the cause of the breakdown, as both sides are equally responsible and to detail any wrongdoing would serve no purpose.
Ms. Meurer has an undergraduate degree from SUNY Oneonta and an advanced degree in mathematics from New York University. She has since obtained a teaching certificate and is currently employed as a high school math teacher in the Wilton Public School System and earning a gross income of $29,058.90 per year. Prior to her marriage, she worked in the commodities industry earning $40,000 per year.
Mr. Tanzman also graduated from SUNY Oneonta. In addition, he holds Series 7, Series 63, Series 24 and Series 25 licenses that permit him to carry on a variety of profit generating trading activities, if he is registered with a firm. Mr. Tanzman has enjoyed considerable success as a day trader, having earned an average of $988,064.43 for the last seven identified years. However, due to changes in the industry, he has been unsuccessful at trading and claims that he is unable to find another job in the field.
In distributing the assets of the marriage and ordering child support and alimony, the court looks to the earning capacities of both parties. The defendant claims that based on his significantly reduced earning capacity, he is unable to pay the prior Pendente Lite order $21,800.00 per month. Additionally, he argues that, based on his diminished earning capacities, both residences should be sold.
The wife proposes that the husband pay child support in the amount of $10,000 and alimony of $11,800 on a monthly basis for a period of 14 years; thereafter $1 per month modifiable on the status of her health. Husband has, pursuant to a stipulation approved on November 22, 2005, been paying $11,800 toward alimony and $10,000 towards child support on a monthly basis commencing January 1, 2006. Mr. Tanzman seeks to reduce and reallocate those funds based on his recent reduction in income.
Section 46b-82 of the General Statutes provides that in determining alimony the court shall consider "the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate and needs of each of the parties." Section 46b-84(d) contains a similar requirement as it relates to the award of child support. Mr. Tanzman asserts that the day trading industry is dead and that he has no other formal training that would permit him to obtain employment at a similarly competitive salary. "The court has a duty to shape its orders so that the family, especially those who are economically at risk, are given protection." Sweet v. Sweet, 190 Conn. 657, 664 (1983).
It is appropriate to enter an award of alimony and child support based on demonstrated earning capacity where the actual income of the party charged with that order is not shown. See McKay v. McKay, 174 Conn. 1, 2, 381 A.2d 527 (1977). In Schmidt v. Schmidt, 180 Conn. 184 (1980), the court determined what type of evidence is required to justify an award of alimony and support when based on earning capacity. The court held that where there was evidence of the specific amount once earned by the defendant or a typical salary of the defendant's ability or experience, that the court was capable of determining the proper amount for alimony and child support. Id. at 190.
The appellate court has held that the amount of alimony and support can be in excess of income thereby necessitating depletion of assets to meet the order. Graham v. Graham, 25 Conn.App. 41 (1991). The defendant in Graham argued that the trial court abused its discretion by ordering him to pay alimony and child support when the payments exceeded his earning capacity. The appellate court disagreed and sustained the trial court's decision. The court found that the husband had a stock portfolio with value in excess of $200,000, the parties had enjoyed a standard of living that exceeded their earning capacity, and husband had previously invaded the corpus of his assets when the marriage was harmonious.
Clay v. Clay, No. FA980717513, 2002 WL 31463167 (Conn.Super., 2002) (33 Conn. L. Rtpr. 312) examined a motion to modify alimony when the defendant claimed that there was a substantial change in financial circumstance. The court rejected his motion, stating:
The defendant's earning capacity was $92,000.00 when he elected early retirement. Poor health did not factor into his decision. Advanced age did not factor into his decision. The alimony order had only been in force for three years when the defendant voluntarily reduced his income at age 57, giving no thought to his financial obligation to the plaintiff. He readily disposed of his separation compensation after filing the motion to modify, even though that package included thirty-six weeks of salary. He has elected to move out of state and to "do nothing" although he may have opportunities to engage in consulting work which, according to the plaintiff, would pay close to what he earned as a full-time employee at [his previous job]. After considering all of these circumstances, this court finds that the defendant's voluntary reduction of salary was unreasonable and does not constitute the substantial change in circumstances necessary to warrant a modification.
Id. at *3
When a person is, by education and experience, capable of realizing substantially greater earning simply by applying himself or herself, the court has demonstrated a willingness to structure its orders on capacity rather than actual earnings. Weinstein v. Weinstein, 87 Conn.App. 699, 706 (2005). The Weinstein court stated that in a marital dissolution action "the court may frame its support orders based on the parties' earning capacities . . . and it is proper for a court to do so when a party has a demonstrable earning capacity but has had unreasonably lower actual earnings." Id. The court held that for a court to impute additional investment income capacity to a party in formulating its support orders, "the court must find that the party has unreasonably depressed investment income in order to evade a support obligation or that the party's investment strategy is economically unreasonable." Id. at 7.
The court has permitted an alimony and child support order based on defendant's earning capacity rather than on his actual income when he voluntarily quit or avoided obtaining employment in his field. Hart v. Hart, 19 Conn.App. 91 (1989). In Hart, the court noted that the defendant had only two job interviews in two years since leaving his job. The court concluded that the defendant had demonstrated an earning capacity much greater than his actual earned income and accordingly based its determination of alimony and child support on the former. Id. at 94. The court stated that "it is particularly appropriate to base a financial award on earning capacity where there is evidence that the payor has voluntarily quit or avoided obtaining employment in his field," and therefore held that the trial court did not err in relying on the defendant's earning capacity in determining his obligations to pay alimony and child support. Id. at 95.
Although Mr. Tanzman has not entered into voluntary retirement, evidence presented indicated that he wished to change his lifestyle to be more inclusive of leisure activities. So while it appears that changes in the means of trading have caused a financial loss to Mr. Tanzman, it remains unclear whether that continued reduction was a voluntary result based on his desire for a more relaxed lifestyle. Mr. Tanzman, at 42, is not an individual of such advanced age that he may now be entitled to respite, nor has he accumulated such extraordinary assets that the needs of his family will be met if he sustains his current employment situation.
Mr. Tanzman has proven he has significant acumen in the market and is adept at identifying and exploiting market opportunities. He has demonstrated great focus and talent in his chosen field demonstrating an in-depth knowledge and understanding of market forces. Although the changes in the market and the industry have proven a challenge to Mr. Tanzman's continued financial success, the court does not believe that he has made satisfactory efforts towards gaining new employment. While he was previously very successful in the day trading business, changes in the market require his adaptation to employment in more profitable financial sectors.
He currently maintains a trading account at Prestige Capital, trading his own $40,000, working less than 40 hour work weeks, often remotely. He testified that other Prestige Capital traders earn up to $500,000 per year. His efforts in gaining new employment include an informal consultation with a tennis partner, Mr. John Weidner, who manages an executive search agency on behalf of financial companies, who helped Mr. Tanzman with his resume and suggested job search strategies. Mr. Tanzman's witness, Mr. Steven Ehrlich, a former colleague who now maintains an interest at Lightspeed Professional Trading testified that jobs existed at his company for which Mr. Tanzman would qualify for employment with the potential of earning between $75,000 and at least $110,000 per year. The court takes into account that Mr. Tanzman has a tarnished record based on having committed securities fraud (not prosecuted), which may diminish his chances of receiving appropriate employment. However, neither witness nor plaintiff's testimony argue that this will hinder his job search efforts. Based on the above considerations, the court cannot order that the alimony and child support be reduced to the amount that plaintiff seeks.
Because Ms. Meurer has the benefit of her mother living with the family, the court believes that she has the capability to work so as to maximize her earning capacity, which the court believes is approximately $75,000 per year. Although full-time employment would consume more of the defendant's time, the children will not suffer because of the convenience of Ms. Meurer's mother living in the home, who will be able to help in the household chores and caring for the children. A full-time position at the Wilton Public School system would pay $48,000 per year.
Since receiving her bachelor's degree, Ms. Meurer has obtained a Masters Degree in Mathematics from New York University as well as a teaching certificate in Connecticut. Prior to the birth of Conor, Ms. Meurer worked for Citibank providing support to commodities traders and as a liaison to customers where her salary increased from $32,000 to $40,000 per year in one year. The court believes that Ms. Meurer's experience in business and educational credentials in business, mathematics and teaching afford her the opportunity to gain meaningful employment beyond her current part-time salary that pays her $29,000 per year. CT Page 20507
Orders Alimony Child Support
The court concludes that the plaintiff has an earning capacity far beyond his current earnings however, evidence presently does not substantiate his agreement under the Pendente Lite order. In addition, the defendant has the opportunity to maximize her own earning capacity. Based on these observations, the court orders Mr. Tanzman to pay $16,000 monthly as unallocated alimony and child support for 14 years; thereafter $1 per month modifiable dependant upon the status of Ms. Meurer's health. The Court has considered the statutory criteria set forth in §§ 46b-81 and 46b-82 in entering its orders.Educational Support
The court will retain jurisdiction pursuant to educational purposes, pursuant to Conn. Gen. Stat. § 46b-56.
Medical Insurance
The defendant shall maintain medical insurance for the benefit of the minor children so long as the same is available to her through her employment. The defendant will make her health insurance available to the plaintiff pursuant to the provisions of COBRA, and the plaintiff will pay for his COBRA premiums. All unreimbursed medical and dental expenses for the children shall be divided equally between the parties.
Life Insurance
The plaintiff shall maintain his current life insurance policies, naming the three minor children as beneficiaries of a death benefit of $250,000 each. He will also name the defendant as irrevocable beneficiary of a death benefit of $500,000 for so long as he is obligated to pay alimony or support.
Property Division
The court has considered the statutory criteria Conn. Gen. Stat. § 46b-81, assignment of property and transfer of title, when determining the equitable distribution of property. When dividing property, it is "the court's duty, pursuant to subsection (c) of § 46b-81, to in addition consider the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estates." Pasquariello v. Pasquariello, 168 Conn. 579, 583 (1975). The court held that when making an equitable distribution of property, a court should take into consideration the plaintiff's contributions to the marriage, which include homemaking activities and primary caretaking responsibilities. O'Neil v. O'Neil, 13 Conn.App. 300, 311 (1988). The plaintiff in O'Neil argued that the evidence of rearing the minor child and upkeep of the family home ought to factor into the equitable distribution. The court stated:
A property division ought to accord value to those nonmonetary contributions of one spouse which enable the other spouse to devote substantial effort to paid employment which, in turn, enables the family to acquire tangible marital assets. The investment of human capital in homemaking has worth and should be evaluated in a property division incident to a dissolution of marriage. We hold, accordingly, that an equitable distribution of property should take into consideration the plaintiff's contributions to the marriage, including homemaking activities and primary caretaking responsibilities.
Id. at 311
a) Real Property:
The martial primary residence, located at 23 Ruscoe Road, Wilton, Connecticut, is valued at $2,075,000. There is existing equity of approximately $1,500,000. The vacation residence, located at 107 East Old Whaling Lane, Dunes, New Jersey, is valued at $946,000. The New Jersey home shall be sold and the net equity shall be divided equally between the parties. The court will maintain continuing jurisdiction if the parties cannot agree to list and sell same.
The more pressing issue is the disposition of the martial residence in Wilton. The children are students in the Wilton Public School system and have significant ties to that community. They are active in sports, theater, music and dance. The court believes that it is in the best interest of the children that they remain in the Wilton public school district, as such a change would cause a significant disruption. However, neither party presented evidence that Ms. Meurer is unlikely to find same should the marital residence be sold. The court orders that the marital home should be sold. Defendant shall receive 60% of the equity in the house and the plaintiff 40%. In order to preserve stability in the children's education, the house shall not be sold prior to June 30, 2007.
b) Motor Vehicles
Ms. Meurer will retain her 2006 Chrysler Pacifica, 2003 Volkswagen Beetle, 1996 Harley Davidson and the 2001 Vespa. Mr. Tanzman will retain his 2003 Lexus 440 and the 2003 Honda Accord.
c) Home Furnishings
Ms. Meurer will retain all furnishings and personal possessions in the marital home except plaintiff's fooseball game and jukebox.
d) Investment Accounts
The plaintiff shall maintain his E-Trade Checking and Prestige Capital accounts.
He shall also maintain his Chase 6-month CD. Connor's Citibank account shall become a U.G.M.A. account for the purposes of his education. Plaintiff shall make no claim to the Bank of America checking account held jointly by the defendant and her mother.
The defendant shall maintain her Sole Citibank Savings and Sole Citibank Checking account. She will also maintain her Bear Stearns Brokerage Account. The defendant shall receive the Citibank Joint Saving, Joint Saving (preferred Money Market) and Joint Checking accounts. She shall also receive the two Chase Savings accounts and Chase Checking account as stated in the plaintiff's financial affidavit dated September 25, 2006.
Retirement Benefits
The plaintiff shall maintain and keep his retirement accounts.
Division of Liabilities
Each party will be solely responsible for individual liabilities as per their respective financial affidavits. The defendant shall not be responsible for any liabilities incurred by the plaintiff that result from his dealings with past employers and/or the Securities and Exchange Commission.
Tax Issues
The defendant shall not be responsible for any liabilities incurred by the plaintiff that might arise concerning present or future tax issues. Plaintiff shall be solely responsible for any claim for New York State taxes.
Pending Litigation
Mr. Tanzman is currently involved in litigation concerning Tanzman Rock Kaban, LLC pending in Bankruptcy Court in New York. Mr. Tanzman shall be entitled to any proceeds of this litigation.
Parenting Plan
The parties have resolved the issues of custody and visitation pursuant to the agreed-upon parenting plan attached hereto and made a part of this judgment. (See Exhibit A attached.)
Counsel Fees
Each party will be solely responsible for their respective attorneys fees.