Case: Jane D. Connolly v. Michael P. Connolly

ICLEF Family Law Case Review

Case: Jane D. Connolly v. Michael P. Connolly

Case Summary by Mike Kohlhaas, Bingham McHale LLP

HELD: Court of Appeals rejects claim by Wife that she was entitled to a supplemental property settlement payment arising from the increase in value of certain property awarded under the Decree to Husband.

FACTS AND PROCEDURAL HISTORY: Husband and Wife divorced in 2005. The parties’ property settlement agreement created the possibility of a supplemental property settlement payment from Husband to Wife, depending upon whether there was an increase in value in certain commercial real estate, the interest in which had been awarded to Husband under the Decree.

Under the Decree, Husband retained his 1/3 ownership interest in an entity called Bantry Bay, LLC (“Bantry Bay”). Bantry Bay, in turn, owned two parcels of commercial real estate. The Decree stipulated that, at the time of the divorce, Husband’s derivative 1/3 interest in one of these properties was $825,000, and the other $466,667. The Decree further provided that, as of May 1, 2009, to the extent that there had been an “increase in the fair market value, if any, occurring to the commercial real estate owned by Bantry Bay LLC and Husband’s one[-]third ownership interest therein,” that Wife would be due a supplemental property settlement payment equal to 20% of the appreciation from the stipulated divorce values.

A controversy arose in that, as of May 1, 2009, the value of one of the Bantry Bay properties had increased in value by $155,000, while the other had decreased in value by $240,000. Wife took the position that she was entitled to a property settlement payment based upon the parcel that had increased in value by $155,000; Husband took the position that the Decree required the change in value of the parcels to be viewed collectively – that is, to look at the value of Husband’s interest in Bantry Bay – rather than viewed by each property individually, and since the properties had collectively lost $85,000 in value, no property settlement payment was due. The trial court agreed with Husband’s analysis, from which Wife appealed.

The Court of Appeals agreed with Husband, noting that, “[w]hile this provision might have been better drafted, nonetheless the parties’ intent is clear: in the event of a post-dissolution increase in the value of Husband’s ownership interest in Bantry Bay, Wife would be entitled to an ‘equalization payment’ based upon an increase in the value of that interest. . . . it is not disputed that Husband’s ownership interest in Bantry Bay decreased. Accordingly, Wife is not entitled to an equalization payment based on Husband’s ownership interest.”

To view the text of this opinion in its entirety, click here: Jane D. Connolly v. Michael P. Connolly

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