Finan v. Finan

Supreme Court of Connecticut
949 A.2d 468, 287 Conn. 491 (2008)

ELI5:

Rule of Law:

When distributing marital property in a dissolution action, a trial court may consider a party's dissipation of marital assets that occurred prior to the parties' physical separation, provided the dissipative conduct occurred either (1) in contemplation of divorce or separation, or (2) while the marriage was in serious jeopardy or undergoing an irretrievable breakdown.

Facts:

Meredith Finan and John Finan were married on September 11, 1982, and had three children.
During the marriage, John Finan allegedly spent large sums of marital funds for his own purposes, including adult entertainment.
A financial report was prepared summarizing the activity in the parties' joint bank accounts from January 1999 through November 2004, detailing these expenditures.
The marriage between the parties broke down irretrievably, leading them to separate and seek a divorce.
Meredith Finan sought to have the court consider John Finan's spending from the years prior to their separation when dividing their property.

Procedural Posture:

Meredith Finan sued John Finan for dissolution of marriage in the Connecticut Superior Court (trial court).
During the trial, the court ruled that it would not consider evidence of the defendant's alleged dissipation of marital assets that occurred before the parties separated, striking a portion of the plaintiff's financial report.
The trial court rendered a final judgment dissolving the marriage and issuing financial orders.
Meredith Finan, as appellant, appealed the trial court's judgment to the Connecticut Appellate Court.
The Appellate Court, finding the record inadequate for review, declined to address the plaintiff's dissipation claim.
The Supreme Court of Connecticut granted the plaintiff's petition for certification to appeal the Appellate Court's decision.

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Issue:

Does a trial court, when fashioning financial orders in a dissolution case, have the authority to consider a party's dissipation of marital assets that occurred prior to the parties' physical separation?

Opinions:

Majority - Norcott, J.

Yes, a trial court may consider a party's dissipation of marital assets that occurred prior to the parties' physical separation. The relevant statute, § 46b-81, requires a court to consider each spouse's contribution to the 'preservation' of the marital estate, and dissipation is the 'financial antithesis of preservation.' The statute itself contains no temporal limitation on when such conduct can be considered. However, to prevent courts from becoming auditing agencies for every marriage and to protect a spouse's right to manage funds during a healthy marriage, this consideration is not unlimited. The court adopts a test used in many other states, holding that pre-separation dissipation is only relevant if it occurred either in contemplation of divorce or while the marriage was already undergoing an irretrievable breakdown. This framework balances the need to protect against wrongful depletion of marital assets with the practical reality that courts should not scrutinize every financial decision made during a marriage.

Analysis:

This decision formally establishes the legal doctrine of pre-separation dissipation in Connecticut, clarifying an issue left open in the court's prior ruling in Gershman v. Gershman. By adopting the majority rule's temporal limitations, the court provides a clear, two-part test for trial courts to apply, preventing overly broad inquiries into a marriage's entire financial history. This framework balances the equitable goal of preventing one spouse from unfairly depleting the marital estate against the rights of spouses to manage assets during the marriage, thereby providing significant guidance for family law practitioners regarding the scope of financial discovery and evidence in dissolution actions.

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