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Kruger v. Kruger

Connecticut Superior Court Judicial District of Stamford-Norwalk at Stamford
Dec 13, 2006
2007 Ct. Sup. 22909 (Conn. Super. Ct. 2006)


No. FST FA 04 0199366 S

December 13, 2006


The parties married on February 9, 1991. There are four children issue of the marriage, twin sons, John and Andrew born on May 13, 1992, a daughter Eliza, born July 29, 1993 and a daughter Bailey, born September 26, 1996. Neither party has been a recipient of state or municipal financial assistance. The marriage has broken down irretrievably with no hope of reconciliation. Judgment of Dissolution enters on the grounds of irretrievable breakdown.

Procedural History

Procedurally, the plaintiff instituted two previous actions for dissolution of marriage: the first action was returned to the court on October 24, 2000; the second action was returned to the court on June 29, 2001. Both actions were withdrawn when the parties attempted reconciliation. The instant action was returned to the court on March 2, 2004 with the husband filing an answer and cross-complaint on July 19, 2004. Trial commenced on February 8th, 2006 with dates continuing on February 9th, 15th, 16th, 17th, 22nd and April 19, 2006. Extensive exhibits were filed by both parties. Counsel for the parties submitted simultaneous trial briefs and proposed orders on May 16, 2006.

In addition, the parties have agreed to joint legal and physical custody of the minor children evidenced by a Stipulation Re Custody and Visitation dated February 8, 2006 which is incorporated by reference in the judgment.

Finally, counsel, in deference to the court's request graciously waived the 120-day rule and granted an extension for this decision until December 15, 2006.

Statutory Basis

Conn. Gen. Stat. § 46b-81(c) provides the statutory framework for equitable distribution of property.

In fixing the nature and value of the property, if any, to be assigned, the court . . . shall consider the length of the marriage, the causes for the . . . dissolution . . . the age, health, station, occupation, amount and sources of income, vocational skills, employability, liabilities and needs of each of the parties and the opportunity of each of the parties for the future acquisition of capital assets and income. The court shall also consider the contribution of each of the parties to the acquisition, preservation, or appreciation in value of their respective estates.

Conn. General Stat. § 46b-82, Alimony, mirrors § 46b-81(c) with the exceptions of the last two provisions and directs the court when awarding alimony to consider "the award, if any, which the court may make pursuant to § 46b-81." The Court therefore will apply the statutory criteria to the facts of this case recognizing that equal weight need not be given to any one factor. Parley v. Parley, 72 Conn.App. 742, 752 (2002).

Factual History The Parties

A. Marie McCormick Kruger is forty-four years old and in good health. This is her first marriage. At the time of the marriage she was twenty-nine years old and worked at Greenwich Capital where she met her husband in 1985 or 1986. She has a BS from Providence College in accounting and, at the time of her marriage was a certified public accountant. She has not worked since 1990. In her last year at Greenwich Capital she was earning approximately $80,000 to $90,000 dollars a year. She began a social relationship with Mr. Kruger in January 1989 culminating in the marriage in February 1991. She brought no assets to the marriage. Since the date of the marriage she devoted her time and energy to the care and raising of her four children, extensive renovations to the marital residence at 35 Binney Lane, Greenwich, CT, care and maintenance of the summer residence in Orleans, Massachusetts, the decoration of the Manor House in London, England and the renovation of her new residence at Keofferam, Greenwich, CT. She has no current plans to work given the schedules of her four children with her concomitant driving responsibilities. "Work would be impossible." 2/16/06 Transcript hereinafter (T.,). From the date of the birth of her twin sons to this date, she has had the assistance, first of a baby nurse, then nannies, at times multiple nannies plus house-cleaners twice a week. Nannies accompany her on vacations with the children and when in residence on the Cape in the summertime. Mrs. Kruger testified that she and the nannies work as a team, splitting daily house responsibilities, driving to school, making beds, food shopping, doing laundry and other errands. Susan Zimmer, a close friend of Marie Kruger, used to socialize with the Krugers and also summered in Nantucket, Massachusetts with her two children and their nanny. She testified that Mrs. Kruger was a "one woman circus" gathering children and was "very hands on." (T., 2/9/06.) Ann-Marie Hickey, another friend of Marie's corroborated this testimony. (T., 2/9/06.) Mrs. Kruger also admitted to being a "physical fitness nut" (T., 2/16/06), running, working out at the gym, a competitive rower and at one time a golf enthusiast, reducing her handicap by 18 strokes one summer at the Cape in either 1998 or 1999. (T., 2/12/06.)

In reference to the finances of the marriage, Mrs. Kruger admitted to little knowledge. Between the years of 1991 to 1997 she testified that there were no discussions concerning finances between the parties. (T., 2/15/06.) She would sign tax returns without reading them. (T., 2/15/06.) She signed an authorization for Mr. Kruger's assistant Wanda to sign on her behalf on the Merrill Lynch account without reading it. (T., 2/16/06.) She had two accounts, one she termed a "construction account" which was joint with her husband and an individual account. (T., 2/15/06.) Monies from the construction account paid for the three major renovations to 35 Binney Lane Greenwich, CT., as well as repairs to the Cape House. (T., 2/15/06.) In addition, Mrs. Kruger had no knowledge if Mr. Kruger had separate accounts. She would ask him for money when she needed it. There were never any discussions concerning the propriety of her spending. (T., 2/15/06.) In fact she could not recall ever being denied anything she wanted other than a watch she decided not to purchase. (T., 2/16/06.) Mr. Kruger has been a very generous provider resulting in his wife's privileged station in life. The court finds that Mrs. Kruger's opportunities for the future acquisition of capital and income is limited. The court also finds that Mrs. Kruger has contributed by her role as a homemaker and in the renovation and decorating skills to preserve the value of their respective estates.

B. Konrad Kruger at the time of the dissolution was fifty-three years old and in apparent good health. He graduated from Trinity College in 1975 with an BA in Economics. In 1977 he earned an MBA from the Amos Tuck School of Business at Dartmouth College. (T., 2/9/06.) This is his second marriage, the first marriage was dissolved in 1990 in the Stamford Superior Court. (Exhibit 1, T., 2/8/06.) At the time of the dissolution of his first marriage, his financial affidavit reported assets of $3,200,000 less court-ordered payments to his first wife. (Exhibit 2, T., 2/8/06.) After payment, his assets were reduced to $1,100,000. (T., 2/9/06.) This sum however, did not include payments earned yet not received nor deferred payments or bonuses which amounted to $5,200,000. (T., 2/9/06.) The total assets Mr. Kruger brought to this marriage in 1991 exceeded $6,000,000. (T., 2/9/06.)

Mr. Kruger, by any standard, is a highly successful, if not brilliant, capitalist. His career and compensation levels evidence a track record unparalled in success and financial acumen. He started his career at Chemical Bank in 1977 earning a modest income. (T., 2/10/06.) In 1983, he worked at Greenwich Capital as a repo trader earning $300,000 a year. (T., 2/10/06.) By 1984, he was earning in excess of $1,000,000 a year. (T., 2/10/06.) In 1990, his compensation exceeded 4 million dollars. (T., 2/10/06.) In 1992-1993, after the marriage, he was promoted to co-president. (T., 2/10/06.) Mr. Kruger, left Greenwich Capital in 2000, receiving $48,000,000 in bonus payments, severance and deferred compensation payments. (T., 2/10/06.) In 2001, Mr. Kruger consulted receiving no income. (Ex. 8.) In year 2002, he had no income.

5 Mile Capital Partners was formed as an LLC commencing in February 2003. Mr. Kruger is a partner in 5 Mile Capital managing three funds; a private equity structure, Housatonic and an arbitrage find. (T., 2/22/06.) There were two outside investors in 5 Mile Capital, AIG and W.R. Berkley. (T., 2/9/06.) Mr. Kruger's compensation is limited to $200,000 year until AIG and Berkley are paid back on their initial investment of 5 million dollars. Mr. Kruger was also involved as a main partner in the acquisition of the commercial lending subsidiary of GMAC.

During the pendency of the trial, in the eight weeks suspension period prior to the trial's resumption on April 19, 2006, Mr. Kruger and his partners purchased 78 percent of GMAC, a commercial real estate subsidiary of General Motors Corporation. The partners' purchase was approximately 32 or 33 percent for the sum of $500 million dollars. Mr. Kruger's one quarter percent interest is reflected on page 9 of his financial affidavit in the amount $1,053,500. This sum represents actual cash paid by him. (T., 4/19/06.) He testified further that this transaction was explained to Mrs. Kruger in her counsel's presence. He also testified that he was legally committed to the deal in December 2005. (T., 4/19/06.) The return on this investment is potentially staggering.

In sum, Mr. Kruger has demonstrated to the court a remarkable ability towards the preservation and accumulation of the assets of the marriage. In addition, he has evidenced throughout his successful career, the ability to acquire future capital assets and income. His financial judgment is uncanny.

In reference to Mr. Kruger personally, he is a committed, caring father to his children. He has two children of his previous marriage, one at Washington State University and one currently attending Deerfield Academy. (T., 2/15/06.) His oldest child, Peter, was a regular visitor in the Greenwich home and stayed in London with the family. Perhaps his commitment is best evidenced by the regularity of his difficult commute home from London to Greenwich or to the Cape when his family was not in residence in England. (T., 2/10/06.) There was also testimony establishing that he cooked breakfast on a regular basis, helped with dishes and vacuuming. (T., 4/19/06.) He also did oversee renovations on Binney Lane, was actively involved with those three major renovations and additions. (T., 2/16/06.) Mr. Kruger was largely responsible for the structural renovations and the landscaping of the English Manor house. (T., 2/10/06.) which was sold at a net-net prior to the commencement of this action.

Causes for the dissolution

Testimony concerning the spending habits of the parties consumed many days of trial. The defendant testified that between February 4, 2004 and February 3, 2006, the plaintiff was advanced $1,400,000. (T., 2/15/06.) In addition to those funds the plaintiff received $4,772,005, two million of which she was required by the defendant to borrow from the children's trust, for the purchase of her new home at 6 Keofferam Road in Greenwich, CT. Mrs. Kruger has expended an additional $625,245 towards the renovation of Keofferam as reflected in her financial affidavit dated 4/19/06. Mrs. Kruger was frequently over budget on the renovations to Binney Lane. (T., 2/16/06.) During the trial, Mrs. Kruger received numerous advances against equitable distribution as evidenced by letters from Attorney Cohen's office to Attorneys Ferro or Marvin. (Exhibits M-O, T.) Nothing restrained Mrs. Kruger's spending. It is interesting to the court that prior to the trial, Mr. Kruger had never restricted her spending or held her fiscally responsible although he would joke that he was the only one married to a CPA who didn't write checks. (T., 2/16/06.)

Mr. Kruger however should be cautious when accusing his wife of being a spendthrift. He rarely denied himself anything he wanted. He spent well over 7 million five hundred thousand dollars on SeaGate from marital assets with no financing. Clearly, Mr. Kruger is in control of the majority of financial decisions within his household. At the commencement of trial, Mrs. Kruger believed she only had access to two accounts, the construction and her individual. While the Merrill Lynch account was joint, Mr. Kruger testified that Mrs. Kruger never used that account although she had the right to withdraw up to $50,000 on one signature. (T., 2/15/06.) Once the trial commenced and Mrs. Kruger realized that Wanda was signing her name to substantial withdrawals without her knowledge or consent, she, through counsel stated on the record that henceforth her authorization was withdrawn. (T., 2/10/06.) Despite that, Mr. Kruger, during the suspension of trial from February 22, 2006 to its resumption on April 19, 2006 had Wanda sign her own name to withdrawals from the Merrill Lynch account in the amount of 1.13 million. In addition, without Mrs. Kruger's knowledge, he withdrew 1.75 million from the Coutts Account to refund the Merrill Lynch. (T., 4/19/06.) Clearly while the wife might be merely indifferent, the husband's conduct approaches financial chicanery. In addition, Mr. Kruger in the eight-week trial suspension spent an additional $300,000 on his house plus $40-50,000 on personal expenses. (T., 4/19/06.)

She did write one check for $30,000 prior to the trial from a check Mr. Kruger gave her.

Charitable Gifts

The plaintiff claimed the defendant's charitable giving to be excessive arguing that it represented either a dissipation of assets or a negative contribution to the marital estate. The court rejects both arguments. The court specifically finds that Mr. and Mrs. Kruger regularly and consistently throughout their marriage, especially after the year 2000 when Mr. Kruger received 48 million dollars, made charitable gifts. Said gifts between 2000 and 2006 totaled 6.85 million. (Testimony, Mr. Kruger, T., 2/9/06.) The charities included donations to the children's schools, Amos Tuck School of Business, the Greenwich YMCA, the American Ballet and most significantly, the Waterside School. This school was founded and funded by Mr. Kruger to benefit disadvantaged children with promise. The court does not find it credible but albeit not impossible that Mrs. Kruger was unaware of this until she read about it in a newspaper.

Courtyard in the name of McCormick.

Sexual Activity

Any sexual conduct post-commencement of the action is irrelevant under Venuti v. Venuti, 185 Conn. 156 (1981), when determining causes for the breakdown of the marriage. Therefore, the court will not consider any testimony relating to either Mr. or Mrs. Kruger's relationships after the commencement of the dissolution proceedings. Evidence was introduced that at some time in 1994-5 the plaintiff would go out by herself to Sam's, a restaurant/bar. There she met a gentleman at the bar whom she subsequently met ten days later at the Hyatt hotel. They kissed one or two times. (T., 2/16/06.) Initially, the court discredited the effect of these two or as the defendant posits, four meetings. (T., 2/22/06.) However, after a review of the transcripts, the court is convinced that these incidents had a devastating effect upon Mr. Kruger. Mrs. Kruger testified that upon the revelation of these incidents to Mr. Kruger, he was devastated, hurt and tearful. (T., 2/16/06.) Whether Mr. Kruger's two plus year affair with Nicole was a justified reaction to Mrs. Kruger's flirtatious behavior begs the question in light of the parties' testimony. Both parties testified that Mr. Kruger could not get over these incidents until he "got even with her by sleeping with Nicole." (T., 2/16/06.) The affair with Nicole commenced in the summer of 1999 and ended in the fall of 2001. (T., 2/22/06.) The discovery of the affair with Nicole precipitated the move of Mrs. Kruger and the children from London, England back to Greenwich. The plaintiff asserted that her marriage was broken down irretrievably in November 2003. (T., 2/16/06.) The defendant however, testified that the marriage was broken down in July 2005, when he learned that she had slept with her rowing coach during the reconciliation period. The court finds that the marriage was broken down irretrievably in November 2003.

The defendant contends that causes of the dissolution involved the plaintiff's inattentiveness to the defendant and the children, her insistence on summers on Cape Cod, the overutilization of nannies, thereby ignoring her parental obligations. Suffice it to say that the court finds that both parties contributed to the difficulties within their marriage. The court refuses to find either at fault. In reference to the defendant's motion to strike the plaintiff's affidavit, the court denies said motion finding that the plaintiff's affidavit, while containing error, was based on information she prepared and delivered to Carly Mitchell. It was submitted and sworn to the best of her knowledge and belief.

Within the framework of the court's findings and the statutory criteria of Conn. General Statutes § 46b-81(c) the court orders the following equitable distribution.

1. The wife shall retain sole ownership of real estate located at 6 Keofferam Road, Greenwich, CT.

2. Within thirty days of the entry of a decree of dissolution, the husband shall vacate the property located at 10 Deer Run Road, East Orleans, Massachusetts and shall execute a duly recordable quitclaim deed transferring to the wife any and all interest he has in and to said property. Membership in the Cape Cod National Club and Rocky Point Club shall vest solely in the wife.

3. The wife shall retain or receive sole ownership of the following:

A. Motor Vehicles

1. 2006 Mercedes

2. 2000 Mercedes

3. 2001 Toyota Land Cruiser

4. 2003 Mini Cooper

5. 1998 F-150 Truck

B. Bank Investment Accounts

1. One-half Merrill Lynch joint account in the amount of $1,614,062.

2. One-half Coutts Co. joint account in the amount of $193,264.

3. One-half Wachovia account #8648 in the amount of $190,891.

4. The Wachovia securities account #0752 in the amount of $87,748.

C. Retirement Accounts

1. One-half Five Mile Capital in the amount of $35,495.

2. One-half Merrill Lynch 401K in the amount of $315,251.

3. First Union IRA in the amount of $47,371.

D. Business Interests and Partnerships

1. Far Hill Press

E. Loans

1. To sister $50,000.

F. Other Assets

1. Jewelry

2. Racing Shells

3. Boats 19' Mako, 15' Boston Whaler

4. One-half American Express Mem. Rewards

5. One-half U.S. savings bonds — EE Patriot $60,000

G. Real Estate

1. The net proceeds of Binney Lane after payment to the husband his equitable distribution of $6,300,000 of $8,216,637.

H. Lump Sum Equitable Distribution

1. $400,000 by way of previously agreed to credits advanced towards equitable distribution (Ex. M, N, O).

$750,000 by way of previously agreed to credits advanced towards equitable distribution.


1. The husband shall retain sole ownership of real estate located at 2 SeaGate Road, Greenwich, CT, sole ownership of the cottage in England.

2. The husband shall retain or receive sole ownership of the following:

A. Motor Vehicles

1. 2004 Porsche Cayeene

2. 2002 Porsche 911

3. 2005 Saab

4. 2003 Biaggi Motor Scooter

5. ATV's

B. Bank/Investments

1. ING Direct

2. Jackson State Bank

3. One-half of the Merrill Lynch joint account in the amount of $1,614,062.

4. Searle

5. One-half of the Coutts Co. accounts #xxxx5062 and #xxxx9366 in the amount of $193,264.

6. One-half Wachovia account #8648 in the amount of $190,891.

C. Retirement Accounts

1. One-half Five Mile Capital 401K in the amount of $35,495.

2. One-half Merrill Lynch 401K in the amount of $315,251.

D. Business Interests and Partnerships

1. Investments per stipulation dated 2/8/06 in the amount of $8,387,500.

2. Five Mile Ventures


4. Five Mile Capital Management

E. Investment Loans

1. Jack Heerman

2. Wanda Ocinaldi

3. YMCA of Greenwich

F. Other

1. Northwest Mutual Life Insurance

2. One-half U.S. Savings Bonds — EE Patriot $60,000

3. 26' Gradyboat

4. Cash of $6,000

5. Jewelry

6. One-half American Express Mem. Reward Points.

The husband shall receive as and for a lump sum equitable distribution the sum of $6,300,000. The court recognizes that this is the amount he brought to the marriage and fully comprehends that it can consider it marital property subject to equitable distribution. The husband shall pay the sum of $2,000,000 to the children's trust in repayment of the promissory note executed by the wife.

The furnishings and artwork of the parties will be divided pursuant to a stipulation dated 4/19/06.

The parties are ordered to cooperate fully in order to implement the equitable division as ordered by the court.

The defendant shall pay to the plaintiff unallocated alimony in the amount of $200,000 per year for a period of ten years, payable in equal monthly installments of $16,666.66 each on the first day of each month commencing with the first month following the entry of a decree of dissolution, with payments continuing until the death of either of the parties, the wife's remarriage, the wife's cohabitation, or the expiration of ten years, whichever event occurs first.

In the event the husband's obligation to the wife as and for alimony and support shall terminate prior to the children having attained the age of majority as defined under the laws of the State of Connecticut, the parties shall negotiate the amount that the husband shall pay to the wife as and for child support. In the event the parties cannot agree, the issue shall be submitted to the Superior Court in and for the State of Connecticut or any other court of competent jurisdiction for a determination.

The defendant shall provide insurance on his life in an amount sufficient to secure the payments of alimony and child support through the proposed terms. The amount of insurance on Mr. Kruger's life may be reduced at periodic intervals to reflect the remaining unpaid payments of the alimony and support terms.

The husband shall pay the reasonable private school expenses for each child's attendance at the school they are presently attending through that child's graduation from said school. The term "educational expenses" as used herein shall include, but not be limited to tuition, books, all fees charged by the institution, all tutoring expenses, and all summer school expenses.

The court will retain jurisdiction pursuant to Conn. Gen. Stat. § 46b-56c, the post-secondary educational support statute.

The parties shall each indemnify and save the other harmless in connection with any claims arising out of the filing of any state or federal tax returns. To the extent that a party's omission of an item of income or inclusion of an item of deduction is determined to create a tax, interest or penalty obligation, then in such event, the party whose omission or inclusion has caused such additional payment to be due, shall pay the entirety of such payment, together with any interest due.

The husband shall be responsible for all reasonably incurred medical and dental expenses for the parties' minor children. The wife shall not incur any medical or dental expenses for the children greater than $250 without the husband's consent. In the event there is an expense greater than $250 and the parties cannot agree as to the need or the provider of such expense, the issue shall be submitted to the Superior Court in and for the Judicial District of Stamford/Norwalk at Stamford for a determination.

The parties will each be responsible for any liabilities listed on their individual financial affidavits.

The defendant will pay to the plaintiff the sum of $100,000 to pay her attorneys fees and costs within thirty days of the judgment.

Summaries of

Kruger v. Kruger

Connecticut Superior Court Judicial District of Stamford-Norwalk at Stamford
Dec 13, 2006
2007 Ct. Sup. 22909 (Conn. Super. Ct. 2006)
Case details for

Kruger v. Kruger

Case Details


Court:Connecticut Superior Court Judicial District of Stamford-Norwalk at Stamford

Date published: Dec 13, 2006


2007 Ct. Sup. 22909 (Conn. Super. Ct. 2006)