2005 Ct. Sup. 14867
No. FA 04 0093085SConnecticut Superior Court Judicial District of Litchfield at Litchfield
November 8, 2005
MEMORANDUM OF DECISION
ELIZABETH A. BOZZUTO, JUDGE.
This is an action for dissolution of marriage and other relief brought to the Judicial District of Litchfield, at Litchfield, with a return date of June 8, 2004. Both the plaintiff, Henrik Aarestrup, hereinafter referred to as “the plaintiff,” and the defendant, Julie Harwood-Aarestrup, hereinafter referred to as “the defendant,” appeared through counsel. The plaintiff proceeded on his complaint dated April 20, 2004. Over the course of three and one half days, the court heard testimony from the parties, as well as five other witnesses, and received into evidence an abundance of documents. Additionally, the court took notice of the entire contents of this file, as well as CV-04 400 10 11, Linda Harwood v. Hendrik Aarestrup. Based upon a review of all of the evidence, the court makes the following findings.
The plaintiff and the defendant were married on October 7, 1996 in Las Vegas, Nevada. The plaintiff has been a resident of the State of Connecticut for at least 12 months prior to bringing this action. There have been no children born issue of this marriage and the defendant is not currently pregnant. Neither party has been the recipient of state nor local assistance.
The plaintiff is 41 years old, born November 28, 1963 in Copenhagen, Denmark. Except for some litigation related stress complaints, the plaintiff is in good health. He has a high school diploma, as well as a “business education” from a university in Zurich, Switzerland. Although he completed the course of study at the university, he did not receive a diploma because he “failed.” The plaintiff speaks seven languages.
The plaintiff came to the United States in 1983 on a tourist visa. He became a permanent resident in 1985/86. This is his second marriage. CT Page 14868
The plaintiff has always been full-time employed in one capacity or another.
The plaintiff’s first job in the United States, after completion of his schooling, was as a sales clerk at a department store in California. Thereafter, in 1986, the plaintiff started his own automotive detailing and restoration business. The plaintiff doesn’t recall what he earned, but does recall that he sold the business for $60,000. He claims never to have been paid.
The plaintiff thereafter staffed an auto accessory importing business. He kept the business for about 2-3 years. There was no evidence offered as to the disposition of this business, nor the plaintiff’s earnings during this time period.
In 1994/95, the plaintiff purchased an antique business from his father for $315,000. The purchase price included an inventory of Scandinavian antiques which had a value of $315,000. The plaintiff has paid his father the sum of $110,000 toward the purchase of the antiques and claims to still owe his father $205,000. The only document that would support this debt is a letter from the plaintiff’s father to the plaintiff, 10 years post-sale, but 10 days pre-dissolution compliant that simply reads, “Dear Hendrik: This is just to confirm our agreement that out of the old loan of $315,000 you still owe us a sum of $205,000. All the best.” (Defendant’s exhibit D). The court finds the validity of this “loan” highly suspect.
The plaintiff’s business, known as “Henrik Aarestrup Scandinavian Antiques,” hereinafter referred to as “the business,” was originally located in California, where the plaintiff was residing. As the name suggests, the plaintiff’s business deals with the purchase, consignment and sale of antiques of Scandinavian origin. In September of 1999, the parties relocated to Sharon, Connecticut. The business continues to operate out of Sharon, Connecticut, although at this juncture it appears to be all but insolvent.
The plaintiff has not filed a personal or business income tax return since the year 2000. The business is classified as an S corporation. The plaintiff is the sole shareholder and officer. The 2000 tax return is the only return that reflects a full year of business at the Sharon, Connecticut location. CT Page 14869
The gross receipts, which are all derived from the sale of antiques, for the year 2000 were $406,725. The cost of the goods was $165,555; The gross profit was $241,170. From the gross profit the plaintiff deducted several expenses, totaling $214,703. The plaintiff admits that the business pays for personal expenses, or at least a part thereof, such as rent, auto, utilities and meals. Of the $214,703 in expenses the following are noted to be at least partially personal in nature:
travel: $49,681 auto: $8,525 meals: $3,437 rent: $42,103 telephone: $5,905 utilities: $5,367 ________ total: $115,018
Even if one were to attribute 50% of these expenses for personal use, therein reducing business related expenses to $157,194, arguable the plaintiff’s income for 2000 was closer to $84,000 than the “ordinary income” claimed on the return of $26,467.
The plaintiff’s income tax returns for 1998 and 1999, although obviously dated, and relevant to the business’s California location, are roughly consistent with the figures from the 2000 tax return.
Besides some bank account and credit card statements, the court has no documentation relative to the plaintiff’s earnings and expenses for tax years ending 2001, 2002, 2003 and 2004.
The plaintiff’s financial affidavit submitted at the time of trial indicates that he grosses approximately $27,000 per year and nets approximately $18,363 per year. This would appear to be a huge and curious increase from the plaintiff’s financial affidavit filed with the court in June of 2005 wherein the plaintiff claimed to be grossing approximately $6,000 per year.
It is a challenge for this court to reconcile the plaintiff’s varying financial condition.
What is clear though, and not disputed, is that since the inception of this action, the plaintiff has sold approximately CT Page 14870 $462,758 worth of antiques. The plaintiff testified that his figure is “below average” for sales. The plaintiff claims the business is failing since the court, on a prior occasion, required the plaintiff to relinquish his passport. Travel to Scandinavia, as both parties agree, is necessary in order for the plaintiff to keep a fresh inventory of antiques for sale here in the United States.
The cost of the antiques sold since the inception of this litigation is approximately $225,000-230,000. Thus, the gross profit is approximately $230,000 over a 18-month period or otherwise approximately $12,777 per month. Even considering reasonable expenses associated with the conduct of this antique business and bearing in mind that the plaintiff has been operating the business under less than ideal conditions, the plaintiff’s antique business provides the plaintiff with more than an adequate income.
The plaintiff’s annual income is clearly greater than the $6,000 claimed in June of 2005 and the $27,000 indicated on the plaintiff’s financial affidavit at the time of trial. Even allowing the plaintiff a 60% write off for expenses after deduction for the cost of the goods, conservatively, the plaintiff has and can net approximately $5,000-6,000 per month.
The plaintiff appears industrious and quite expert in the buying and selling of Scandinavian antiques. Once this litigation is over, with passport in hand, the plaintiff has the ability to resume a full scale, successful Scandinavian antique business.
The defendant is 37 years old, born April 3, 1968 in Michigan. The defendant has been treated for an undiagnosed psychiatric condition and currently sees a therapist for 2-3 hours per week. Other than that, the defendant appears to be in good health. The defendant has a high school degree, as well as a two-year degree in animal science from Blackhawk College in Illinois.
From 1989-1996 the defendant was employed as a fashion model, living and working for all but three months, at various locations throughout Europe. There was no evidence as to the defendants earnings from her modeling career, but in 1996 when that career was over and the defendant moved to California, she only had a 1965 Oldsmobile convertible and approximately $20,000 of debt. CT Page 14871
Aside from odd jobs, the plaintiff has been unemployed since 1996. The court has no documentation of the defendant’s earnings.
Since the inception of this litigation, the defendant has provided child care, waitressed, house-sat and cleaned stables. Some of the jobs were done in exchange for room and board. The defendant testified that she could be earning approximately $200-300 per week, but instead has chosen to “work on design ideas.” The defendant would like to start her own business, post-dissolution, but was vague as to particulars. The most the court could gather is that the defendant would like to relocate to New York or Los Angeles and start a design business that may involve the designing of jewelry and/or handbags.
The defendant’s financial affidavit shows no income with the exception of what she receives by way of pendente lite alimony. Her living expenses are estimated at this point since she is currently residing with friends or friends of friends, free of charge.
Despite the defendants current employment situation, there was no evidence that would indicate that the defendant couldn’t work full-time at a minimum wage. The court attributes to the plaintiff a net weekly wage of $250.
The parties met in California in August of 1996 at a gas station where the defendant was employed as a pump attendant. The defendant filled up the plaintiff’s gas tank and a friendship ensued. Five weeks later the parties were living together and exchanging personal vows in Tahiti. Two weeks later, the parties made it official with a civil ceremony in Las Vegas.
The parties blame each other for the failure of their marriage. The plaintiff claims the parties had differences over money and that the defendant interfered with the business. The defendant claims that the plaintiff has found someone new. The parties have not been intimate for five years preceding the filing of this action. There was no marital counseling.
Despite all of the blaming that took place over the course of this trial and plaintiff counsel’s irresponsible personal attack of the defendant during closing argument, the court finds both the plaintiff and defendant to be resourceful, capable and well intended. Both parties know that this marriage is over, for many reasons, big and small, that occurred along the way, and this CT Page 14872 court will not attribute fault to either party.
The parties originally resided together in California. The plaintiff was running his antique business. The defendant was unemployed, but did assist the defendant with various details of his business. The clientele consisted of movie stars and people of affluence.
In September of 1999 the parties moved to Sharon, Connecticut. There was some conflicting testimony as to what motivated the parties to move to Connecticut. Neither party had any ties to Connecticut. It would appear to this court that whether the plaintiff wanted the move or the defendant wanted the move, the move was centered around what would be best for the antiques business.
The parties settled into a rental property, consisting of two buildings on a main thoroughfare in Sharon, Connecticut. The two buildings provide a warehouse for storing antiques, a show room to display antiques and an apartment in which the parties resided. Both buildings needed to be renovated. The cost of the renovation was approximately $100,000. The plaintiff claims to still owe money for the cost of the renovation.
The plaintiff worked full-time at the antique business. The plaintiff took monthly trips to Scandinavia to purchase antiques to supply the store. The plaintiff has many business contacts abroad and what would appear to be an abundance of Scandinavian antiques readily available for import to the United States. It would appear from the testimony that the current clientele of the business is either people of affluence or decorators. It further appears that a good part of the business is conducted by phone and the actual shop is a secondary venue for revenue generation.
There was a slight variance in testimony as to the defendant’s contribution to the plaintiff’s business. The plaintiff testified that the defendant was never employed by the business, but did help with “mailings,” helped paint the buildings, provided names of decorators, and watched the shop when the plaintiff was in Europe on buying trips. The defendant testified to the same, but also added testimony that would indicate that she was involved with the clients and the selection of antiques. The defendant readily admits that as far as the actual financial function of the business, she had no input nor responsibility and left that to the plaintiff since it was “his business.” Either way, it is CT Page 14873 clear that the defendant’s participation in the business was minimal. It would appear that the plaintiff accommodated the defendant’s assistance, but never required it and often encouraged her to “find a job.”
During the entire course of this marriage the parties acquired no assets. There is no real estate, no savings, no investment accounts, no insurance, medical or life, no retirement. The only asset the parties have is the plaintiff’s business, which has housed them, fed them and entertained them.
Although neither party submitted a business valuation, the evidence is clear that the business is only worth whatever it can import and sell. A shop full of Scandinavia antiques in Sharon, Connecticut provides a significant stream of income. An empty shop, which is the current condition of the business, provides no income stream.
The marital estate currently consists of the following assets:
1) two dogs;
2) the parties personal belongings;
3) two accounts receivable held by the business:
a) $8,000 owed by a client; and
b) $22,000 owed from Bradford Galleries, Ltd.
4) anticipated income of $10,000-$20,000 from the remaining inventory of the business; and
5) a 1990 Mercedes Benz, a 1990 Alpha Romeo and what is left of a 1965 Oldsmobile, if that can be considered an asset at all.
The only other potential asset subject of this litigation is a collection of Scandinavian antiques currently held, pursuant to court order in storage at Westies Storage, in Stamford, Connecticut. The subject antiques are listed in plaintiff’s exhibit E and total more than 200 items with an estimated value of $275,000.
Neither party claims to own these antiques and have put forth CT Page 14874 no evidence to support an ownership interest. The plaintiff asserts that these antiques are owned by seven different and independent European antique dealers. The defendant asserts that these antiques are owned by the business.
Although one would think if the owner of the business, the plaintiff, does not assert an ownership interest in the antiques, the inquiry would be over. But the defendant asserts that the business’s relinquishment of a claim to the property is essentially a fraud on the court in an effort to remove the property from the marital estate.
The evidence at trial would support the conclusion that the antiques currently held at Westies Storage are not owned by the business.
In support of his position, the plaintiff asserts that his business received these antiques on consignment at various times over the course of several years. He asserts that the antiques are owned by the seven different and independent European antique dealers, known more commonly in the context of this litigation as “the interveners” and here in referred to as the interveners. The plaintiff has been doing business with most of the interveners for several years. Some are simply business acquaintances; others are friends. All seven interveners have submitted affidavits revoking the alleged consignment agreement with the business and demanding immediate return of their property. Several of the various items have been on consignment for years. The invoices submitted are set forth on the various interveners letter-head and the items indicated on the invoices generally compare with the goods set forth on the plaintiff’s exhibit E. Most, if not all the invoices, are actually marked “consignment.”
The seven interveners pursued and were granted third-party status in this litigation. They hired and were represented by counsel. The same seven have filed a separate and independent action against the plaintiff, defendant and plaintiff’s business in Stamford Superior Court in which they seek a pre-judgment attachment of the antiques, as well as return of this property.
The defendant asserts that the goods were bought by the plaintiff’s business and are not on consignment. To support her claim, the plaintiff testified that she was present when the plaintiff purchased many of the items. She further asserts that CT Page 14875 some of the invoices submitted by the interveners are marked “paid.” Essentially, the defendant asserts that the interveners claim to the antiques is a fraud and all the documents submitted by them are fraudulent.
In order to be persuaded by the defendant’s testimony, one would first have to believe that the plaintiff convinced not one, but seven businessmen to file false affidavits, hire a lawyer and participate in not one but two lawsuits to assist the plaintiff in retaining, by fraud, some $275,000 worth of antiques. Although stranger things could happen, this court finds it entirely unlikely. Further, the court would have to disregard all of the interveners invoices as a fraud, as well as their sworn affidavits. In light of the evidence provided by the defendant, this court is not inclined to do so.
Although the court finds the defendant to be truthful, her testimony was often theoretical or based upon surmise that was often inconsistent with common sense and not supported by the evidence. The defendant’s own testimony cannot support her claim relative to her theory on the subject of the consigned goods. It is undisputed that the plaintiff traveled to Scandinavia monthly to purchase antiques. It is undisputed that the defendant traveled only two times per year to Scandinavia with the plaintiff, the motivation primarily was for holiday travel, not business. On all occasions when the plaintiff and defendant went together, the plaintiff always spoke either Swedish or Danish with the interveners, depending upon the location. The defendant never understood the conversation nor the nature of the transaction. The defendant didn’t know or care for that matter at that time, whether the transaction was a purchase or consignment. Further, the defendant herself admitted that she was not involved at all in the financial end of the plaintiff’s business and would not know what inventory was purchased or consigned. Additionally, evidence was admitted that would clearly refute the possibility that the defendant was even in the country at the time of one of the transactions she claims to have witnessed.
The court concludes that the better and weightier evidence supports the conclusion that the business does not own the goods set forth on plaintiff’s exhibit E.
Aside from the issue between the plaintiff and the defendant, relative to the subject antiques, the court notes the following relative to the interveners and the goods stored at Westies in CT Page 14876 Stamford, Connecticut.
After the interveners were granted third-party status, the Court (Brunetti, J.) held an evidentiary hearing relative to the interveners claim. The court was unsatisfied with the evidence presented and ordered the items returned to the business. In an articulation, the court indicated that although it was not persuaded that the interveners were the owners of the disputed property, it did not make any findings as to the true owner. The court left it to the trial judge to make that determination. However, the interveners failed to appear for trial. The court can only assume that the interveners were operating under the mistaken belief that their claim was withdrawn the day before trial. Although a withdrawal was filed with the court the day before trial, it is not effective except by leave of court, with good cause shown. This court rejects the withdrawal. A default judgment enters against the interveners as to their intervener complaint. The property currently held at Westies shall not be released until the interveners pay the $5,000 fine imposed by the court (Brunetti, J.) in his order dated June 21, 2005.
The only remaining issue for the court is the parties debt which is extensive. On his financial affidavit the plaintiff lists $469,379.41 in “business liabilities,” one of which is the $205,000 allegedly owed to his father. A majority of the other debt is for unpaid taxes, both state and federal and debts to suppliers.
The defendant lists $57,300 in debt, most of which is either owed to her mother or her lawyer.
This court has considered all of the provisions of Connecticut General Statutes § 46b-82 regarding alimony; § 46b-81 regarding property division and § 46b-62 regarding attorneys fees. The court enters the following orders:
A. BY WAY OF DISSOLUTION:
1. The marriage between the parties is dissolved and each party is declared to be separate, single and unmarried.
B. BY WAY OF ALIMONY:
1. The plaintiff shall pay to the defendant periodic alimony at the rate of $250 per week for a period of 3 years from the date CT Page 14877 of this judgment. The alimony shall be non-modifiable as to amount and term.
C. BY WAY OF PROPERTY:
1. The plaintiff is awarded the following assets, free and clear of any claim by the defendant:
a. Hendrik Aarestrup Scandinavian Antiques;
b. the 1990 Alpha Romeo;
c. his personal effects; and
d. the right of first refusal on one of the dogs.
2. The defendant is awarded the following assets, free and clear of any claim by the plaintiff
a. the items set forth on plaintiff’s exhibit I;
b. her personal effects;
c. the 1990 Mercedes Benz;
d. one of the dogs (If the plaintiff does not choose to keep one of the dogs, then both dogs are awarded to the defendant); and
e. whatever is left of the 1965 Oldsmobile.
3. The parties shall share equally in the following property:
a. the account receivable for $8,000 owed to the business;
b. the $22,000 owed from Bradford Galleries, Ltd.; and
c. the anticipated income of $10,000-$20,000 from the inventory remaining in the business at the time of trial.
D. BY WAY OF DEBTS: CT Page 14878
1. Each party shall be responsible for the debts as listed on their financial affidavits, submitted at the time of trial, and hold the other harmless and indemnify thereon.
E. BY WAY OF ATTORNEYS FEES:
1. So as not to undermine the court’s other financial orders, the plaintiff shall pay to the defendant’s attorney the sum of $2,500 as and for attorneys fee, due within 45 days of this decision.
1. The court shall restore to the defendant her maiden name of Julie Harwood.
2. The defaulted interveners shall pay the $5,600 fine issued by the court on June 21, 2005 within thirty days of this decision.
3. Upon payment of the $5,000 fine by the interveners, the courts orders restraining the subject antiques is terminated.
CT Page 14879 Antikvitetshandel, Ole Spenster, Jan-Ake AF Trampe, Jan-Erik Ohgren, Napoleon Antique AB, and Antiqvm AB. The court, Brunetti, J. granted the motion on February 7, 2005.
CT Page 14880