Connecticut Supreme Court Holds Support Awards Based on Earning Capacity Must Specify Its Dollar Amount

In a Connecticut Supreme Court decision, Tanzman v. Meurer, the Court held that when a trial court has based an alimony or child support award on a party’s earning capacity, the court must determine the specific dollar amount of the party’s earning capacity.[1] The Court overruled a previous Appellate Court decision, Chyung v. Chyung,[2] which held that a court issuing a lump-sum alimony award based on earning capacity was not required to specifically state the dollar amount.

Case Details

The plaintiff, Jonathan M. Tanzman, appealed from the judgment of the Superior Court, Judicial District of Fairfield, denying his postjudgment motion to modify his unallocated alimony and child support obligations to the defendant, Margaret E. Meurer.[3] After the Appellate Court affirmed the trial court’s denial the plaintiff’s motion, the Supreme Court granted his appeal. The issue before the Supreme Court was whether a trial court issuing a financial support order based on a party’s earning capacity must determine the specific dollar amount of the party’s earning capacity.

The relevant facts and procedural history as summarized by the Appellate Court show on October 6, 2006, in connection with its judgment of dissolution of the parties’ marriage, the trial court entered an order requiring the plaintiff to pay the defendant $16,000 per month in unallocated alimony and child support for a period of fourteen years. The court found that the plaintiff had an earning capacity far exceeding his then current income, but did not specify the amount of the earning capacity.

While the court determined that the plaintiff had earned a yearly average of $988,064.43 in his career as a day trader over the previous seven years, due to changes in the day trading industry he was unable to find another job in the same field and consequently was earning much less. Nevertheless, the trial court concluded that, “Although the changes in the market and the industry have proven a challenge to the plaintiff’s continued financial success, the court does not believe that he has made satisfactory efforts [toward] gaining new employment.”[4]

Motion to Modify Support Order

On January 9, 2008, the plaintiff filed a motion to modify the support order in which he represented that he had obtained employment at an annual salary of $100,000.  He contended that, because his current income was “a fraction of the earning capacity previously attributed to him by the trial court,” there had been a substantial change in circumstances justifying a modification of the award.[5] The plaintiff filed a motion for articulation of the original support order, asking the trial court to articulate the specific earning capacity that it had attributed to him at that time. The trial court denied the motion for articulation.

After a hearing, the trial court denied the plaintiff’s motion for modification of the support order.  The court stated that, at the time of the original support order, it “was not persuaded that there was a serious commitment and effort to maximize [the plaintiff’s] earning capability and the court’s position has not changed.” Again, while the court did not specify the amount of the plaintiff’s estimated earning capacity, it found that the plaintiff’s income had not been reduced significantly since the date of the original support order, and accordingly, concluded that the plaintiff had not clearly shown a substantial change in circumstances justifying a modification of the award.

The plaintiff then filed a motion for clarification of the court’s decision in which he requested the court to clarify whether it had considered “any amount of ‘earning capacity’” in connection with the motion for modification and, if so, “what amount did it consider?” The trial court denied the motion for clarification.

Motion to Review

The plaintiff appealed the trial court’s denial of the motion for modification to the Appellate Court and filed a motion to review.  The Appellate Court ordered the trial court, regarding the October, 6 2008 support decision, “to state whether the court made a finding of the plaintiff’s current earning capacity and, if so, the specific dollar amount and the factual basis for that finding.”[6] 

In response, the trial court issued an articulation in which it stated that it had not made a specific finding of the plaintiff’s earning capacity in connection with its October 6, 2008 decision denying the motion for modification. Instead, it stated that “at the time of trial the plaintiff had not made efforts to maximize his earning capability and based on the evidence presented at the modification hearing including his financial affidavits the court’s position was essentially the same.”[7]

The Appellate Court affirmed the judgment of the trial court, denying the motion for modification.  The Appellate Court reasoned that, because the trial court’s “evaluation of the plaintiff’s earning capacity, as a foundation for its award and denial of the plaintiff’s motion for modification, remained unchanged throughout the underlying proceedings,” and because “the plaintiff has failed to provide us with any statute, case law or rule of practice that require[d] the trial court to specify an exact earning capacity when calculating an alimony and child support award”; “the trial court’s failure to specify an amount did not require reversal.”[8]

The Supreme Court’s Decision

On appeal, the Supreme Court agreed with the plaintiff who argued that the Appellate Court improperly determined that the trial court is not required to determine the specific amount of a party’s earning capacity when that factor provides the basis for a support award.  The Supreme Court reversed the judgment of the Appellate Court affirming the trial court’s denial of his motion for modification and remanded to the trial court for a new hearing at which the court must determine the plaintiff’s earning capacity.[9]

In its opinion the Supreme Court articulated the law relevant to its decision. § 46b–86(a) provides that a final order for alimony may be modified by the trial court upon a showing of a substantial change in the circumstances of either party.  Under that statutory provision, the party seeking the modification bears the burden of demonstrating that such a change has occurred.”[10]

The trial court may under appropriate circumstances in a marital dissolution proceeding base financial awards, pursuant to General Statutes §§ 46b–82 (a) and 46b–86, on the earning capacity of the parties rather than on actual earned income.[11] Earning capacity is not an amount which a person can theoretically earn, confined to actual income, but rather “it is an amount which a person can realistically be expected to earn considering such things as his vocational skills, employability, age and health.”[12]  “When determining earning capacity, it … is especially appropriate for the court to consider whether [a person] has willfully restricted his [or her] earning capacity to avoid support obligations.”[13]

A Similar Case: Chyung vs. Chyung

The Supreme Court recognized that the Appellate Court relied on its previous decision in Chyung v. Chyung, to support its conclusion that, when a trial court relies on a party’s earning capacity to determine the amount of a financial award, the court is not required to specify the particular dollar amount of the party’s earning capacity. In Chyung, the trial court awarded the plaintiff a lump sum alimony payment of $350,000 based in part on the parties’ earning capacities.[14] 

The plaintiff appealed from the judgment, claiming that “the court’s failure to identify the defendant’s precise earning capacity resulted in an award that was based on speculation and conjecture.” The Appellate Court rejected the plaintiff’s claim, stating that she had “failed to provide us with any statute, case law or rule of practice that requires the trial court to specify an exact earning capacity.”[15] Unlike the present case, the plaintiff in Chyung had failed to file a motion for articulation of the court’s decision, rendering her claim unreviewable.

The Supreme Court overruled the holding of Chyung, except to the extent that the trial court had determined the specific amount of the defendant’s earning capacity in the support award but it has merely failed to articulate that amount in its support order, that failure does not automatically require reversal. Also, to the extent that it held that, when a party has failed to seek clarification as to whether the trial court failed to determine the specific amount of earning capacity or whether it merely failed to articulate the specific amount in its support order, a claim that the trial court improperly failed to determine a specific amount of earning capacity is unreviewable for lack of an adequate record.[16]

The Ultimate Decision

In the case at bar, the plaintiff did seek an articulation of the trial court’s determination of his earning capacity in its determination of the original support order and its decision to deny his motion to modify.

In reversing the Appellate Court the Court stated, “As the present case shows, the failure to specify the dollar amount of the earning capacity leaves the relevant party in doubt as to what is expected from him or her, and makes it extremely difficult, if not impossible, both for a reviewing court to determine the reasonableness of the financial award and for the trial court in a subsequent proceeding on a motion for modification to determine whether there has been a substantial change in circumstances.”[17]

Therefore, the Supreme Court concluded, “when a trial court has based a financial award pursuant to § 46b–82 or § 46b-86 on a party’s earning capacity, the court must determine the specific dollar amount of the party’s earning capacity.”

Because the trial court could not reasonably have concluded that there had been no substantial change in the plaintiff’s earning capacity between the time of the original financial award and the motion for modification without ever having determined the plaintiff’s specific earning capacity, the trial court abused its discretion when it denied the motion for modification.  The Supreme Court determined the appropriate remedy was to reverse the judgment of the trial court denying the plaintiff’s motion for modification and order a new hearing on the issue of his earning capacity.[18]

If you have any questions or would like to speak to a divorce law attorney about a divorce or familial matter, please don’t hesitate to call our office at (203) 221-3100 or email Attorney Joseph C. Maya at JMaya@mayalaw.com. We offer free divorce consultation as well as free consultation on all other familial matters. Divorce in CT and divorce in NYC is difficult, but education is power. Call our family law office in CT today.

[1] Tanzman v. Meurer, 18812, 2013 WL 3288091 (Conn. July 9, 2013)

[2] Chyung v. Chyung, 86 Conn.App. 665, 862 A.2d 374 (2004)

[3] Tanzman v. Meurer, 128 Conn.App. 405, 406, 16 A.3d 1265 (2011).

[4] Id.

[5] Id at 408.

[6] Id. at 410.

[7] Id.

[8] Tanzman v. Meurer, 128 Conn.App.405, 412, 413 (2011).

[9] Tanzman v. Meurer, 18812, 2013 WL 3288091 (Conn. July 9, 2013)

[10] Simms v. Simms, 283 Conn. 494, 502, 927 A.2d 894 (2007).

[11] Lucy v. Lucy, 183 Conn. 230, 234, 439 A.2d 302 (1981).

[12] Weinstein v. Weinstein, 280 Conn. 764, 772, 911 A.2d 1077 (2007).

[13] Bleuer v. Bleuer, 59 Conn.App. 167, 170, 755 A.2d 946 (2000).

[14] Chyung v. Chyung, 86 Conn.App. 665, 675 (2004).

[15] Id. at 676.

[16] Tanzman v. Meurer, 18812, 2013 WL 3288091 (Conn. July 9, 2013)

[17] Id.

[18] Id.