Part III: Lorna J. Wendt v. Gary C. Wendt
In 1985, the defendant became President and Chief Executive Officer of GE Capital Services, Inc.
The last full year before he became the Chief Executive Officer,
the GE 1983 Annual Report stated, "GECC earnings increased 32% to
$271 million and net earning assets grew 12% to $13.5 billion in 1983.
The nation's largest diversified financial services and leasing company,
GECC . . . ." Exhibit 109, Page 10 (Note: General Electric Credit Corporation,
GECC, was apparently the former name of General Electric Capital Services
, Inc., GECS). The 1995 GE Annual Report stated,
"In 1995, we again registered a double-digit rise in earnings
- up 16% to a record $2.4 billion." Exhibit 95, Tab 3, Page 40.
The 1996 draft annual report of General Electric Corporation was
offered into evidence. It had not yet been published. This was a very unusual report.
It was the first time that GE was treated as one corporation,
divided into Product Service and Media Business, and GECS was
treated as a second separate corporation, all in one annual report.
Exhibit 110. Letters to shareholders, page 3.
"Earnings reached another record: 2.8 Billion, up 17% or 400 million - from 1995 levels." Exhibit 110.
It appears from these exhibits that GECS was a small but growing part
of a very large company in 1983. It appears that GECS was a large
but growing part of a very large company in 1996.
In documents the
defendant submitted into evidence he was quoted as saying
"that any award must be shared by many." The defendant also said in his last annual
meeting with GECS executives, "We must lead. We must be the best, you must be the best you can be,
but this year I want you to make sure that all your people can be the best they can be
." Exhibit 111. The defendant testified that this is his leadership style.
The growth at GECS demonstrates the results of this 12 year leadership.
GECS earnings increased from $271,000,000 in 1983 to $2,817,000,000 in 1996,a ten fold increase.
This is approximately 20% compounded annual growth for the last 13 years.
In 1983, GECS was responsible for slightly more than 13% of GE's net earnings,
and in 1996, that percentage grew to slightly less than 39%. Exhibit 109, Page 43, Exhibit 110, last page.
The defendant did testify concerning his view of the testimony of the plaintiff concerning
her duties as "corporate wife." The defendant said that there were only
a few dinner parties and that on a number of occasions the plaintiff objected
to giving those dinner parties. It was only in the last five years that there were
high level executives at the annual corporate Christmas party in their home.
All of these parties were prepared by caterers with the assistance of the GECS staff.
The plaintiff testified that she baby sat for the Singhs, an Indian client, while the defendant
was playing golf. The defendant said that this was a one time event and she did not
baby sit for any other clients. The plaintiff never packed a bag for him when he was going
on a trip. She never made him breakfast. In the last five to seven years she paid the household bills.
For the first twenty-five years he paid all the household bills.
He did all the household financial planning throughout the entire marriage.
The defendant testified that the plaintiff was a good mother and a good wife.
The plaintiff traveled with the defendant on a small number of business trips,
however, only when she wanted to. These were a small percentage of the defendant's business trips.
The plaintiff would always travel on the Pinnacle Club trips. The defendant's testimony
did not denigrate any of the positive efforts the plaintiff made for the betterment of the Wendt family.
The defendant acknowledged that she was a good mother and a good wife.
The defendant was only commenting that she made little,
if any, efforts that are attributable to the success of GECS.
After the first few years that the defendant was CEO of GECS, the defendant
started to travel extensively. At first, as CEO, travel was for a day or two,
then home, and then fly to the next meeting. He would do this at least two or
three times per month. Sometimes there was international travel which involved
one to three weeks away from home. On some of these trips the plaintiff
accompanied him. During this period of time the plaintiff took care of the children.
They then started to use a sitter service. In 1986, the oldest daughter went to
college so minimal help was needed for the fourteen year old daughter while both
parties travelled. Generally the plaintiff would require a week or so advance
notice of these various trips. On some occasions the notice was much shorter.
The plaintiff testified that she had travelled to at least forty countries with
the defendant as CEO. A number of these trips were on the GE corporate
jet in the United States. Generally, commercial airlines were used for traveling abroad.
There were three types of GE trips: (1) business, (2) Pinnacle Club reward,
and (3) combination business and Pinnacle Club inspection.
The plaintiff would also attend an annual luncheon given for GE wives.
The plaintiff would discuss the wife's general role. The GE luncheon was given
at the GECS executive dining room on Long Ridge Road, Stamford.
These dinners were planned, presented and arranged by the Human
Resources Department of GE, including Angelo Astone.
The defendant was active in civic affairs. On a number of occasions
he was honored at various dinners which the plaintiff attended.
The plaintiff had entertainment obligations at those civic affairs dinners.
The entertainment became more formal when they moved to Erskine Road,
and it was a policy to have two large annual Christmas parties.
One was a black tie Christmas party with over one hundred people attending.
A caterer was hired by GE for the party. The plaintiff helped the caterer.
The defendant wanted to have his employees and GE guests treated with dignity
. On many occasions there was a pianist and a harpist, and on one occasion,
the 1994 Christmas party, Marvin Hamlisch entertained the guests.
This was a first class Christmas party. A second annual Christmas
party was usually given. It was less formal, generally a social occasion
for the Wendts' personal friends, some of whom were associated with GE.
Again, a caterer was hired. This once a year dinner was of benefit to the defendant's career.
The house was designed by the plaintiff and the defendant for entertaining.
The court examined Exhibit 39, a fifteen minute video of the interior and
exterior of the 328 Erskine Road home, a split level with a two level foyer.
The rear of the house is three levels. The court examined the decorations,
furniture and furnishings. The video showed the interior and the exterior.
The exterior improvements included multiple rear decks, a formal entrance
with a circular driveway, a swimming pool and extensive landscaping.
The plaintiff served on the boards for the Stamford Symphony and the Center For The Arts
. This was a valuable contribution to the defendant's career and community standing.
The parties were active in their church. Many of those connected with these
groups were guests at the second Christmas party.
On business trips the plaintiff read from a 7-10 page trip folder prepared by GECS.
By this method the plaintiff would become familiar with the purpose of the trip.
The defendant testified that the plaintiff read it only when she was on the plane.
The plaintiff did not dispute that fact. It appears to the court that there
was not a substantial amount of advance knowledge or planning by the
plaintiff for these GE trips except for the Pinnacle Club reward trips.
This is buttressed by Exhibit 41, a seven page trip itinerary for a
business trip to Central Europe in which both parties participated.
Numerous options and suggestions were made by the GE employee responsible for the trip.
The only changes were handwritten notes made only by the defendant.
The only reference in Exhibit 41 to the plaintiff's contribution to the planning
for that trip was at the end: "P.S. In response to Lorna's request she can
dress quite casually for the tours. It is going to be hot." Exhibit 41, Page 3.
At many of the business social occasions, the plaintiff and the defendant would
not be seated at the same table. The plaintiff would then carry on a
conversation as to the nature of the GE deal with those at her table
. The plaintiff felt that she was a corporate officer wife.
She testified that she became familiar with the deal and the background information
in order to do her job. The plaintiff was never hired by GE to speak or be familiar with any GE business.
The plaintiff was never paid by GE. The plaintiff was never on a corporate payroll.
The plaintiff was never briefed at GE headquarters.
The plaintiff did not attend GE meetings except for occasional ones related
to Pinnacle Club trips.
It appears from the evidence, including the examination
of a three page list of trips for 1993 through 1995, (Exhibit 32) that the plaintiff
and the defendant never really took a pure personal vacation except
to visit their parents.It appears to this court that although
the trips were of a lavish style, they were paid for by GE and not by the parties.
Exhibit 32 contains all the GECS business trips, GE Pinnacle Club or Pinnacle Club
inspection trips for 1993-1995 in which the plaintiff participated.
In 1993, the trips were to Florida, Central Europe, California twice,
Arizona, London, Scandinavia, India and Asia. In 1994, the trips were
to Northern Europe twice, Florida, Singapore, California, India,
the Mediterranean and Asia. In 1995, the trips were to Australia,
California, China, Florida, MidAtlantic states, Rome, Bermuda
and Eastern Europe. It appears the annual Pinnacle Club reward
trip for each of these three years was to Scandinavia (1993),
India (1994) and Rome (1995). The remainder were business trips.
The 1993 trip to India was an inspection trip for the Pinnacle Club
trip for the following year. The 1994 Mediterranean trip was an
inspection trip for the 1995 Rome Pinnacle Club trip. The 1995
China trip was an inspection trip for the 1996 Pinnacle Club trip.
The Pinnacle Club trip was a reward for top performing GECS management.
Top management and their significant others would be invited on the Pinnacle
Club trip. Angelo Astone, who managed the Pinnacle Club program, said that
their purpose was to "reward the GECS employee." He has said to awardees,
"Your spouse actually contributed to the success you had, we want to
reward both of you." These were luxury trips with more than 100 people in
attendance. The plaintiff did go on most of these Pinnacle Club trips in
which she was always designated as part of "a host couple." She claims
that she was the ultimate hostess. The plaintiff claims she was present
to correct any errors, to include all people in the trip activities and to be informed
as to the terms and conditions of the trip so that she could be of assistance.
However, there was a full professional travel staff from GECS and local
tour guides present throughout all of these Pinnacle Club trips.
The day-to-day travel and planning functions were not taken care of by the plaintiff
or the defendant, but were handled by the GECS staff and their local representatives. |
