Part II: Lorna J. Wendt v. Gary C. Wendt
TRIAL INFORMATION
The court, after hearing the evidence, finds the following facts:
The plaintiff wife, whose maiden name was Lorna Jorgenson, and the defendant husband,
Gary C. Wendt, were married July 31, 1965, in Rio, Wisconsin
Both parties have resided inConnecticut for more than one year
prior to the date of institution of this dissolution of marriage action.
The complaint is dated December 19, 1995. There are two daughters
born of this marriage. Both daughters have long since completed college.
They no longer reside in the family house and are self supporting.
The defendant is the Chairman, President and Chief Executive Officer of GE Capital Services, Inc.
with principal offices in Stamford, Connecticut.GE Capital Services, Inc.
(GECS) is the largest division of General Electric Corporation (GE) which
in turn is reported to be one of the largest corporations in the world.
Early in the marriage the plaintiff earned modest wages as a public school music teacher.
Throughout the entire marriage she has been a mother, homemaker and corporate wife entertaining
GE customers and other business associates in various social and business settings.
The plaintiff was neither employed nor paid by General Electric or GE Capital Services, Inc.
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The parties were raised in a small midwestern town near Rio, in central Wisconsin.
When they started dating in high school, the plaintiff was a freshman, and the
defendant was a sophomore. They attended the same high school.
The plaintiff was involved in debating, music, piano lessons and a church youth group.
There were limited offerings in women's sports.
The defendant competed and lettered in all the organized school sports
. The defendant was class valedictorian and a class officer. T
he parties both played in the band; the plaintiff played oboe, and the defendant played trombone.
They were members of a singing group. They were active in the same Lutheran church.
The defendant attended the University of Wisconsin
, and the plaintiff would visit the defendant every weekend during her senior year in high school.
The following year the plaintiff attended the University.
The parties became engaged when the plaintiff was a junior in college.
The defendant majored in Civil Engineering and took a few business courses.
The defendant was asked by a professor at the University of Wisconsin to study for an MBA
at an eastern graduate school. Prior to that he had intended to return to his home town
area as a highway civil engineer. The defendant's father was the owner of a local limestone
grinding business. Both of his parents came from a working class background.
Neither were college educated.
The plaintiff received a Bachelor of Music Degree from the University of Wisconsin
and is qualified to teach public school music
. Upon the plaintiff's graduation, the parties married and moved to Cambridge,
Massachusetts where the defendant attended Harvard Business School.
For a portion of the first year the plaintiff worked part-time at M.I.T
in the industrial relations department.
During the second year the plaintiff taught music in the Sudbury public school system at an
annual salary of no more than $6,000. The plaintiff also gave private music lessons.
The defendant's Harvard tuition was paid by his parents.
During the summers the defendant worked full time for a Concord, Massachusetts land developer.
The earnings from both parties and a portion of the defendant's $2,500 savings from prior employment
supported the household for the two years in Cambridge.
The defendant also worked part time during his second MBA year.
The parties believed that they were two little kids from a small town
in Wisconsin and that it was exciting to move to a big eastern city.
The parties had virtually no money. There was little social life other than
seeing other students at their houses. The plaintiff did the shopping and cooking.
The defendant was given assignments on Friday for completion on Monday.
The plaintiff assisted the defendant by typing his papers. T
his required extensive weekend work for both parties.
The defendant received an MBA from Harvard after two years.
At graduation all the spouses (then wives since there were no women
MBA candidates) received PhTs (Putting Hubby Through).
At trial the first two exhibits offered in court were copies of the defendant's MBA,
Exhibit 29, and the plaintiff's PhT, Exhibit 30. Ann L. Estin,
"Maintenance, Alimony and the Rehabilitation of Family Care," 71 N.C. L. Rev. 721, 757 n. 135 (1993).
The defendant's first job was for a Spring, Texas real estate developer in the Houston area.
The parties had very little personal property. It took four hours for the parties to pack all
their personal possessions. The parties purchased a new house from the defendant's
employer for $25,000.00. The plaintiff taught public school music and kept house.
A cleaning woman came once every three weeks. There were no more than six
occasions for business entertainment in a year since the defendant worked for a small real estate developer.
The plaintiff stopped working as a public school music teacher shortly after the birth of their first daughter in De
cember of 1968. This was her last job. The plaintiff continued as a part time
piano teacher and church organist. The parties spent four years in Texas.
The defendant's employer merged, and the new corporation moved the Wend
ts to Atlanta. This move was a mutual decision. The parties had accumulated little
personal property. As in all the family relocations the plaintiff arranged for a majority of the moving.
The parties could not afford to purchase a house in Georgia without selling the Texas house.
The defendant left, and the plaintiff stayed behind, sold the house and then moved to Georgia.
The defendant was unhappy with his new job in Georgia. The plaintiff characterized her husband as
a very honest person who believed that his new boss was not trustworthy .
By agreement the defendant left his job just before Christmas.
The defendant took some time off to see if he could go into his own real estate business
with a partner and then decided not to. While the parties lived in Georgia,
there was little business entertainment and no household help.
The defendant's next job was with a real estate investment trust (REIT) he
adquartered in Coral Gables, Florida. The plaintiff testified that she stayed in Atlanta
to put the house in order, sell it, move, look for a new house and move in.
This was the parties' third house. The defendant denies that and claims that they
both drove down to Florida together and he arranged for the sale of the house
with the corporation paying for the packers and movers. The defendant
claims that they still owned little personal property. The plaintiff planned
the interior decorating. Both parties agree that they jointly decorated the
Florida home, painting, papering and installing a new lawn.
The REIT job involved a number of trips each month. The plaintiff continued to be
involved in their local church as an organist and choir director,
as well as a mother and a homemaker. The plaintiff had no household help in Florida.
The plaintiff entertained defendant's co-workers at dinners, barbecues and an occasional pool party.
The parties' second daughter was born in July 1972. The child needed extensive medical care
and was admitted to hospitals multiple times during her first year. The defendant was usually
traveling, but offered on a number of occasions to come back home. The defendant's job
obligations had increased and became more demanding. As a result, the plaintiff did
more of the homemaking and family duties.
In the early 1970's, the real estate market was poor in Florida, and,
therefore, the defendant looked for another job.
. Both parties discussed him taking a job with GE Capital Services,
Inc. in Stamford, Connecticut. The defendant got the job in July, 1975 .
and left for Stamford leaving the plaintiff and the two minor children in Florida.
The defendant came to Florida every other weekend. The parties took joint trips
to Stamford and discovered that the cost of living was extremely high.
The plaintiff sold the Florida house. The parties house shopped while living
in the Norwalk Holiday Inn. The plaintiff drove the oldest daughter, who was
in second grade, to school in Stamford and the younger child to nursery school.
The parties then bought a small fixer upper house in Stamford.
The plaintiff became involved with the children in school activities.
Both parties joined a church. The plaintiff took the children to lessons,
kept house, played tennis and met his business associates. The defendant travelled
quite a bit. His first job was vice president of the real estate department of GE Capital,
utilizing the expertise that he developed through his prior jobs in Texas, Georgia and Florida.
Both parties recognized that working for a large international corporation was a major social change.
Their social life in the past revolved around church and co-workers.
Now, entertainment, more formal and on a larger scale, increased to six or seven times a year.
Corporate clients were included.
. The defendant would discuss with the plaintiff
various deals during his Texas and Georgia jobs.
The defendant spoke to the plaintiff about development in Florida,
including seeking suggestions of improvements in the recreational portion of a project.
The wife claims that these discussions were a contribution that she made to the marriage. .
Business entertainment while in GECS Real Estate Division involved small
noncatered dinner parties of about 12 to 14 people. The first household help was hired in 1978.
The household help would also assist at the dinner parties.
Both parties would help clean up after these dinner parties.
From 1975 through 1986 a large percentage of their social and personal life
revolved around family. The plaintiff was a wife, mother, homemaker and
a great supporter of her husband in his life. The children were educated in the public elementary system.
The plaintiff had household help once a week and no live-in help.
The plaintiff characterized herself as a "GE wife supporting her husband in every aspect of his job."
The defendant was transferred from one division of GECS to another, increasing his responsibilities.
Each of the divisions were in some sort of trouble prior to the defendant's new assignment.
The defendant was successful in rescuing the troubled divisions.
This increased his prominence in GE.
Socially, the parties went out more often including business functions,
dinners in New York, entertainment by executives of other GE divisions a
nd conventions involving GE and GECS staff.
As a GE wife, she read newspapers, spoke with him about deals,
assisted in business entertainment and was supportive of his executive role at General Electric
. The plaintiff claims she did more than the normal "entertaining corporate wife."
The plaintiff's entertainment duties expanded with the expansion of the defendant's duties.
Entertainment now involved travel. The clients might invite them to parties in New York City,
out of town dinners or a golf engagement. GE executives travelled regularly;
at times the trips included three to ten days away. On a number of those occasions
the plaintiff would accompany the defendant, either on business trips or corporate conferences.
In 1986, shortly after the defendant became the CEO of GECS,
the parties sold the first house and moved to a second house in Stamford.
It was a standard four bedroom center hall colonial. In 1988 the parties bought
vacant land on Erskine Road, Stamford. They built a house which they occupied
in July, 1990. According to the plaintiff's appraisal, Exhibit 57, the house
has 3 1/2 baths, 4 bedrooms and 5,068 square feet of gross living area above grade.
In addition, there is a family room, exercise room and bathroom in the basement.
No longer did the parties have time to fix up the house.
The defendant was able to arrange for people to do the painting and decorating.
The plaintiff hired a designer to do the interior as she had done with the
second house the parties owned in Stamford. Not agreeing on the house design,
they compromised. The plaintiff got a traditional front, and the defendant
got a modern rear. "We both designed this house actually.
The front is mine and the back is his, and that he likes contemporary glass
and I like the traditional. But we somehow melded it all together."
Testimony of Lorna Wendt, December 3, 1996, page 49.
After 1988 the plaintiff no longer gave piano lessons because of the demands of GE travel.
Her last full-time job was in 1968 which she left just before the birth of their first child.
The plaintiff has not resumed her music career.
The court concludes that up until 1986, the parties lived modestly.
Their children had attended public school. Their social entertaining,
although involving some business, was mainly with friends and church members.
There was no live-in help, only day help once a week. They lived a refreshingly honest
, modest, hardworking midwestern life, espousing and living the conservative ideals
that they both had grown up with. Exhibit 31. They instilled these values in their children.
Much of the trial was devoted to various witnesses testifying about the contributions made by
the parties to the marriage and GE from 1986 to date.
Often the testimony of witnesses conflicted even as to certain common events.
All the witnesses do agree that the wife spent considerable efforts as a wife, mother,
homemaker and "GE wife" and that the husband was highly successful as the CEO of GECS.
In an effort to balance the conflict in the testimony and to establish the major legal issues
in this case, the testimony of certain witnesses will be reviewed.
The plaintiff claims that she is aware of the decision in
O'Neill v. O'Neill, 13 Conn. App. 300,536 A.2d 978 (1988) and the courts' required consideration
of nonmonetary contributions of a spouse. On cross-examination the plaintiff testified
as to the amount of time that she spent on her duties. She said her job was a mother,
housemaid, cook, child care provider, corporate wife and homemaker.
The plaintiff described the time spent on her job as "twenty-four hours a day."
There was testimony of the substantial hours each week the defendant devoted
to his duties as CEO of GECS including weekends and extensive travel.
The plaintiff conceded that the defendant provided nonmonetary benefits to the family
. She conceded that the defendant drove the children to camp and college,
helped with homework, attended recitals and attended a number of school functions,
but this was a small contribution compared to the efforts of the plaintiff's nonmonetary family contributions.
The defendant testified about diaper changing, laundering and caring for the girls' various allergies
and illnesses as well as the girls' college and graduate school decisions.
The plaintiff conceded that essentially all the monetary contributions to the marriage
were due to the defendant's work at GECS. For the last 15 years,
except for the purchase of homes, the financial decisions were made by the defendant.
All contact with the family accountant was by the defendant. T
he accountant testified that in the 15 years of doing income taxes for the parties he met the plaintiff once.
GECS has twenty-seven subsidiary divisions. The defendant's job required visits to all these
divisions as well as business trips for future acquisitions. The oldest daughter was then
in college and the youngest was a teenager. The defendant would travel a week to three
weeks in a row, be home for a few days and leave again. The plaintiff would join him on
some of these trips, often on a few days advance notice, e.g., "I need you on this California trip this week."
The oldest daughter, 28, is a graduate of a private eastern college.
She attended public school, and for the last two years of secondary school,
a private day school in Stamford. She is currently a graduate student at NYU,
having started in September, 1996. The youngest daughter, 25, is a graduate
of a private eastern college. She attended public school and for the last four years
of secondary school a private day school in Stamford.
She received a Masters in Human Resources from a small midwestern
university in September, 1997. The defendant paid for all of their schooling.
Both of the parents are justifiably proud of the accomplishments of their two children,
especially their solid midwestern values. Both parties acknowledged that the other party
had made substantial contributions to these moral and family values
that the two children possess. Both parties continue to maintain good relations with their daughters.
A summation of the testimony of the witnesses as to the plaintiff's nonmonetary
contributions is as follows: She was an excellent representative of motherhood,
very organized, a very good cook and a piano teacher for years. She did house
cleaning, and "she even did windows." She paid the household bills, arranged
for auto repairs and maintenance. She was a good role model for the children.
Her duties included clothing, feeding, driving, music, school, conferences,
church activities, clubs, lessons, kids' concerts and recitals, after school activities,
car pools, doctors, being present in the house regularly, housecleaning, grocery
shopping, kids' needs, kids' questions, games and school homework. She was
extremely hospitable and sociable. She talked to people, remembered details
about people's lives and mixed with people. She was always pleasant during
home entertainment. She related to men and women alike and was a
cheerleader on a number of GE trips. She was extremely neat.
The children were neat, their clothes had no stains and the house was immaculate.
She ironed her husband's shirts, raised two young children, entertained, sewed
clothing, took the children to the doctor, attended Girl Scouts, went to school
events, saw children's friends, used organizational skills and polished social skills.
Guests were made to feel welcome in her house. She was a good cook.
She was a member of the Lutheran Church, and both parties regularly
attended with the children. She covered for her husband, i.e.,
gave reasons why her husband was not present at certain social events.
The court found this testimony credible. It was buttressed by a number of wit
esses, including past and present GE employees.
The court concludes that the above litany represents
the nonmonetary contributions to the family portion of the
marriage by the wife. O'Neill v. O'Neill, supra, 13 Conn. App. 311.
In addition to these nonmonetary contributions to the family,
the plaintiff made nonmonetary contributions to the husband's career at GECS.
These contributions will be discussed separately.
The witnesses also testified that the plaintiff had to give up p
iano lessons due to the defendant's business requirements and the plaintiff's
efforts necessary to support those requirements by traveling.
From that testimony and testimony about the Pinnacle Club trips,
this court concludes that it was the voluntary choice of the plaintiff to give up
conducting private piano lessons and not resuming a public school
teaching career so that she could go on luxury trips for GE.
Any abandonment of the wife's "career" was voluntary on her part
. The plaintiff has not resumed any portion of a music career
since the December, 1995 separation.
A witness also testified that at the 1995 Christmas party at the parties' home,
when the dissolution was in the process of being filed, the plaintiff told this witness,
"I do not know how I can go through with this party because of my marital problems,"
and yet, she did go through with the party. The party was a success.
This court, therefore, concludes that the plaintiff, although receiving the
benefits of being "a corporate wife," did give the defendant's career priority in her life.
Another witness who is employed as a chief financial officer for a financial company
and who worked for GE for twenty years, including two years at GECS,
testified that the plaintiff set an example for GE wives.
GE is a family organization tending to treat spouses and employees as a part of a team.
Both parties were part of the GE team, and the witness concluded the plaintiff was a "team player."
A long term public relations specialist for GECS testified that
she worked on the same floor with Gary Wendt on a daily basis,
and attended business meetings and staff meetings.
The witness discussed issues on deals, attended investment
committee decisions and was in daily contact with Gary Wendt.
The plaintiff was not present at any of these meetings or occasions.
This witness left GE employment in October, 1995 and cannot testify to later events.
From this testimony this court concludes that the plaintiff was not involved
in the day-to-day activities of the defendant at his office.
Essentially the plaintiff's direct GE contributions were:
(1) discussing GE matters with the defendant at home and on trips,
(2) providing support to him,
(3) entertaining GE customers, associates and business guests away from home,
(4) an annual home Christmas party for GE,
(5) business travel with the defendant, and
(6) participating in GE Pinnacle Club reward trips for GE high executives.
A number of witnesses testified concerning the defendant's business skills.
The defendant is generally known as a deal maker.
For example, the defendant was concerned about lending to Tiffany's,
a premiere jewelry store. For the first time in the lending industry,
GE loaned money secured by the name of the business.
The intangible name, Tiffany, became an asset that could be loaned against.
This new lending technique was developed by the defendant and has now become
common in the lending field. A number of witnesses stated that the defendant's creation
of leveraged buy-outs was the seminal event in the industry.
It was widely publicized that GECS had done this transaction.
As a result, GECS became a leader in leveraged buy-out transactions.
This witness felt that Gary Wendt had an incredible depth of understanding
of each and every business transaction including speculative credit matters.
As to the defendant's contribution to GECS, a witness testified that
"he earned what he was paid, even though he was well compensated."
The defendant claims that the success of GECS is attributable to
everybody who worked for GECS. The court concludes that the defendant
made the most substantial contributions of all of its employees to GECS's success.
A French representative of GECS testified that the defendant had quite
a lot to do with every deal in that:
(1) he knew the details,
(2) he thought very rapidly,
(3) he looked at the strategic side and was insightful, and
(4) he could identify the leverage and the opportunity in the deal.
He characterized the defendant as a "deal maker."
"That's how GECS was successful, he made deals."
The defendant was and is actively involved in community affairs.
The defendant created a position in the Stamford regional community
as an active hands-on fund raiser. In 1989, he visited the Boys and
Girls Club in Stamford at their Stillwater Avenue location.
They were working out of a modular trailer. The defendant then
contacted other corporate executives and set in motion a plan
. A 7:30 a.m. breakfast meeting was held. This meeting and later efforts
raised a substantial amount of money to construct a new facility for the
Boys and Girls Club in Stamford. The defendant designed a plan to help the
Stamford Public School system. The defendant was director of the
Regional Planning Network of the tri-state area. He established
a larger Board and created a five year plan. He was not just a director in name
but an actual working director. The defendant created a "Reach Out" program
for the Stamford Center For The Arts involving inner city youth.
The defendant has received the following awards:
(1) 1990 The Walter Wheeler Award for SACIA for work in the Stamford public schools,
(2) 1995 - The national Herbert Hoover Humanitarian Award on behalf of the Boys and Girls Club of Stamford,
(3) 1996 Friends of Youth by Outward Bound, and
(4) 1996 - Corporate Leader Award by the Volunteer Center of Stamford for raising 3 million dollars.
The defendant is currently involved in the community and is the
1997 Chair of the Tri-State United Way with the principal job of calling on CEO's
in corporations located in New Jersey, Connecticut and New York.
Tri-State is in charge of 30 separate local United Ways.
The defendant is also active with University of Wisconsin
fund raising and the local United Way Allocations Committee.
Although he has GECS corporate assistants to aid him,
he is an active participant in these corporate community services.
A witness, a former GECS executive until 1995,
testified that as CEO he exceeds the bounds of leadership.
The defendant was a visionary.
The defendant was able to determine trends.
He developed a strategic plan to put GECS into the marketplace
so that GECS continued to grow.
The defendant is a leader of all people, and is results oriented.
According to this witness, this resulted in an average annual growth for GECS of 20% per year
over a consistent ten year period with a 20% return on equity for those same ten years.
The defendant was capable of speaking at meetings for over an hour without notes
and was an excellent motivator of people, setting goals and strategies,
and obtaining results from all his high executives.
The defendant's management style was not hands on.
The defendant did not micromanage GECS.
The defendant allowed his junior executives to perform on their own.
The defendant had a good sense of humor.
The witness said he was easy to work with in this highly charged atmosphere.
The court will now discuss some of the defendant's monetary and nonmonetary contributions
. After that discussion, more details of the plaintiff's GE contributions will be referred
to and then the court will draw conclusions.
When the defendant graduated from the University of Wisconsin,
he intended to be a civil engineer, a road builder on the Interstate Highway system.
The defendant had taken some business courses at Wisconsin.
A professor asked him to consider an MBA. He did and applied to the best schools in the country.
The defendant's father ran his own business which he built up from nothing.
This gave the defendant inspiration. The defendant believes that this interest in small business
is important in the context of what he is doing today. He wrote his MBA thesis on land development.
The defendant's first job in Texas involved selling lots. It was hard work.
The defendant later became involved in the business end of land development.
Six months later he was able to take over a subdivision, analyze the cash flow
, and bring in new ideas and concepts in order to revitalize the subdivision.
Prior to completion of this task his company was liquidated, and he was transferred to Atlanta.
The defendant had no money, but he became wiser as to risk and what it meant to borrow money.
The defendant's eventual job with a Real Estate Investment Trust in Florida involved
35 to 40 employees. It was at that job that he learned that it was how well you
financed that gave you an edge. The defendant learned how to do deals but still
had not learned how to make money. By that time both children had been born.
The defendant was earning $35,000 a year in Florida just before he started with GE Capital Services, Inc.
in the summer of 1975. The defendant started in Stamford at the same $35,000.
He had been married to Lorna Wendt for ten years.
The defendant testified that during their first ten years of marriage
, there was no major corporate role for the plaintiff, and the plaintiff made
no employment contributions. The parties lived on the defendant's salary.
The defendant had a decent salary. The parties lived comfortably and were
able to save approximately 20% of the defendant's earnings.
GECS had a small real estate department which had problems.
This was the defendant's first assignment. In the defendant's first year he was
able to earn a bonus because he did build up the business, however, not as successfully as he wished.
The defendant found that the real estate department was in much worse
condition than represented. GECS had an inventory of at least a thousand
unfinished and unsold Florida condominiums. Even though there was no market for Florida condominiums,
he convinced GECS to finish all the units. The market came back.
The GECS condos, first on the market, sold. In six months he was made manager
of the real estate department. The parties purchased their first house in Stamford in the $77,000 price range
.
Previously, GECS had only been a lender. It usually sold off most of the closed loans.
The defendant became involved in the Houston Astrodome refinancing and recommended
that GECS participate more actively in the equity side of the transaction.
The defendant ran the real estate division as a business and obtained a positive cash flow.
According to his testimony, "he took action, he took measured risks."
In 1978 the defendant became the head of the larger Leasing and Industrial Loan Department.
The defendant became involved in complex airplane leasing and other leveraged transactions.
In 1981 the defendant was appointed manager of Commercial and Industrial Loans.
The 1981 tax code change was good for business. After 1981, leasing was used to create tax benefits.
The defendant was successful. The defendant then started to look for companies
that managed assets and not just companies that were interested only in borrowing money from GECS.
The defendant testified that "when you make money at GE, you get noticed."
In 1984, he was promoted to Chief Operating Officer of GECS. |
