Part IV: Lorna J. Wendt v. Gary C. Wendt
Mr. Astone testified that the plaintiff, as the wife of the CEO, had no defined role on
the Pinnacle Club trips. Mr. Astone liked to have the plaintiff on Pinnacle Club trips.
She was a great shopper. She knew which area had better shopping opportunities
and a group would be sent there on free time. Mr. Astone offered no other evidence
of contributions made by the plaintiff to GECS, either at home or abroad.
A witness testified about four separate Pinnacle Club trips to (1) Egypt; (2) Greece and Turkey; (3) Singapore, Bali, Malaysia and Vietnam; and (4) Italy Sea Goddess Cruise including Rome. The witness saw first hand the efforts that the plaintiff and the defendant made as "host couple." The witness said that the plaintiff was congenial, outgoing to others, attended cocktail parties and dinners, went on tours and shopping trips, and circulated on these Pinnacle Club trips. Those Pinnacle Club trips were organized and cared for on a day-to-day basis by GE staff as well as the outside staff at the various locations. The trip was fully staffed and any planning involving the luggage, transfer, tickets, local transportation, meals, plane tickets and lost luggage was taken care of by outside staff. The plaintiff and defendant acted only as social hosts. There was no business conducted on these Pinnacle Club trips.
More than 10% of the GE employees on the Pinnacle Club trips were designated as "hosts." For example, 199 participated in the 1995 Pinnacle Club trip and of these, 30 were designated as "hosts." The defendant, as CEO, was always designated as a "host." According to Angelo Astone, the spouse of a "host" had to attend all functions and events along with the host. The spouse had no duties other than to be social. Mr. Astone acknowledged that the plaintiff performed her host functions.
Mr. Astone arranged the Pinnacle Club trips with the assistance of Carlson Marketing, a Minneapolis travel consultant. He asked Carlson to contact local tour companies called "ground suppliers." He then had numerous meetings with Carlson. A trip outline called a grid would be compiled before either of the parties were contacted. Then Mr. Astone would go on his own inspection trip. Any corrections in the trip would be made after consulting with Carlson and the ground suppliers. He would plan another inspection trip with the travel staff of GECS, usually in conjunction with a business trip for the defendant. The plaintiff, defendant, Astone and one other GECS executive would travel on this combined business/Pinnacle Club inspection trip. The purpose was to look at what Astone, Carlson and the ground suppliers had arranged. The defendant would do business on the trip. Mr. Astone never reviewed the Pinnacle Club trip grid with the plaintiff, however, he reviewed it with dozens of GECS people.
On some occasions the plaintiff made a suggestion or two about hotel amenities. Other than shopping locations, Mr. Astone never made a substantial Pinnacle Club trip change based on the plaintiff's suggestions. The last Pinnacle Club inspection trip the plaintiff attended was the trip to China in 1995. She recommended that the day long Li River cruise portion of the trip be excluded. She did not go on the 1996 China Pinnacle Club trip because the parties were then separated. There was no evidence that the Li River cruise was cancelled. Mr. Astone testified that he never met with the plaintiff to discuss the trips nor did he meet her anywhere else other than the occasional time she would casually stop by his office when she was in the building visiting the defendant.
On the Pinnacle Trips 12-17 tour guides were always available to satisfy the concerns and needs of the participants. They ran everything associated with the trip. The hosts and their spouses had to: (1) go on the tours, (2) attend meals, and (3) have a good time. There were no meetings, lectures, business conferences or seminars at the Pinnacle Club. Shortly before the Pinnacle Club trip, Mr. Astone arranged for a luncheon at the corporate headquarters for the spouses of the "hosts" to review the upcoming trip. The plaintiff always attended. Mr. Astone would conduct the program, not the plaintiff.
A substantial amount of evidence was offered concerning the June, 1995 Pinnacle Club trip which was a combination Mediterranean land/sea trip. Brochures were prepared by GECS. The plaintiff had suggested some different lunch locations and some daily trips. Consequently, the brochure was changed. There had been an inspection trip the year before on which the plaintiff had traveled. The 1995 brochure was offered as Exhibit 33. As a "host" it was the parties' job to make sure the others had a good time. The plaintiff testified that she would informally advise people what was going to be seen on the tour and assist them on their "free time." Although most meals were arranged on a group basis, the plaintiff testified that she would advise as to restaurants to use for "free time." Exhibit 33 also shows that the plaintiff did not always perform these duties as a "host." When the ship was docked at Sorrento for the late afternoon and evening and the brochure invited the guests "to enjoy a bit more of Sorrento," the plaintiff was not in Sorrento assisting the guests, but was on board. She received aromatherapy at 4:30 p.m. and had her hair done at 5:30 p.m. even though there was nothing special planned for the evening. The following day after a morning in Capri, the plaintiff enjoyed a facial and massage on board at 3:00 p.m. and had her hair done at 5:00 p.m.
Exhibit 33 notes that where both the employee and spouse are designated as "Hosts," two asterisks would be after their names. Yet, in Exhibit 33 there was only one asterisk next to Gary and Lorna Wendt's name. Apparently, on this 1995 Pinnacle Club trip she was not designated as a host. In 1994 the plaintiff was also not designated on a GE Pinnacle Club report as "host," just the defendant. Exhibit 87.
A substantial amount of photographs of this trip were offered by the plaintiff to support her claim of nonmonetary contributions. They included a formal dinner at the Monte Carlo Sporting Club, Exhibit 35 ; an informal dinner in a castle, outside of Florence, Exhibit 36 (5 photographs); as well as a photograph of side trips, Exhibit 37 (3 photographs). The plaintiff testified that she was also part of the administration of a GECS bicycle trip in southern France, biking from hotel to chateau along the Dordogne River Valley. She offered the French itinerary, Exhibit 42, and a number of other documents to buttress her position that she performed administrative duties.
A French witness came to the trial and testified that the plaintiff had nothing to do with the organization of the French bicycle trip. There were five couples from the U.S. and four French couples on the trip. They were serviced by four vans and seven staff members along with "Terres D'Aventure," the French bicycle tour company. A number of the guests were unable to ride bikes and rode in the vans. The witness testified that the trip was somewhat of a failure. A number of the individuals could not complete the bicycle trip and had to travel in the vans. The plaintiff did not perform administrative functions. Administrative matters were taken care of by French and U.S. GECS employees as well as the bicycle tour representatives.
This court concludes from all the testimony as to the plaintiff's involvement in the Pinnacle Club trips that she was one of a number of "hosts" and as a corporate wife her functions were minimal. They were of a social, not a business nature. The court concludes that any attempt to show that she performed some supervisory or administrative role during the Pinnacle Club trips is an exaggeration.
Testimony was furnished about the plaintiff's contributions on strictly business trips. Exhibit 44 is a photograph of a Krakow, Poland bank that GECS was apparently trying to degovernmentalize and acquire. Although the plaintiff tried to show that she had some intimate knowledge of this business transaction, this knowledge was limited to the showing of the photograph which occurred on an August, 1995 inspection trip through the central European countries. Exhibits 42 and 43 may furnish some explanation for that fact. While the defendant had meetings and lunches with the Polish Ministry of Finance, a representative of the Polish Center Bank, the President of the Gdansk Solidarity Bank and other executives, the plaintiff had a 15 minute tour of the city, watched a 20 minute movie in the historical museum and spent from 9:30 a.m. to 1:00 p.m. shopping.
There was extensive testimony and documentation concerning a business trip from October 29th to November 10th, 1994 through Japan, China, India and Hong Kong. Exhibit 45, a detailed itinerary, illustrated the obligations of each of the individuals. In each country there was a local representative of GE present. GE travel representatives also went on the trip. There were meetings with other GE wives at a luncheon as well as separate sightseeing tours for the wives supervised by the GE local representatives. Generally, during this business trip, the plaintiff was either hosted by a local GE wife or by a client's wife. On some evenings clients would be entertained at dinner. Exhibit 45 does disclose dozens of meetings, conferences and presentations attended by the defendant. The plaintiff was not included in the itinerary except for air travel and the occasional dinner.
The last GECS trip taken by the plaintiff was a combination business/Pinnacle Club inspection trip to China and Southeast Asia. The trip stated on October 7, 1995 in Beijing and ended on October 18, 1995 in Bangkok. A seven page detailed itinerary was offered as Exhibit 40 entitled "Mr. and Mrs. Gary Wendt and Mr. and Mrs. Denis Nayden, Asian Visit, October 7-18, 1995." The two men were GE employees and the two women were GECS wives. Mrs. Nayden, wife of Denis Nayden, President of GECS, is included in virtually the entire trip: (1) she flew with the defendant and her husband on the same plane. The plaintiff arrived separately two days later; (2) she conducted the Pinnacle inspection tour with Angelo Astone of GECS and a representative of Carlson without the plaintiff; (3) she attended the GECS Beijing dinner at the China World Hotel with her husband, the defendant and the GE Capital Beijing staff without the plaintiff; (4) all four then went on a day trip to inspect Xian for the 1996 Pinnacle Club trip; (5) neither she nor the plaintiff were involved in any activities nor did they attend the business meeting in Guilin. No local GE representatives were with the wives; (6) all four went on a day trip on the Li River inspection cruise for the 1996 Pinnacle Club trip; (7) neither she nor the plaintiff were involved in any activities in Hong Kong until a barbecue dinner the second night with GECS professional staff and spouses; and (8) the two women flew home from Hong Kong while the men continued to Jakarta and Bangkok for business. No Pinnacle Club inspections occurred in Indonesia or Thailand and therefore the court concludes that only China and Hong Kong were included in the 1996 Pinnacle Club trip. Exhibit 40 demonstrates the minimal involvement the plaintiff had on this trip. Except for the two Pinnacle Club inspection tours to Xian and the Li River and the October 4, 1997 barbecue with GE Capital staff and spouses, the plaintiff appeared to have played no GE role in this trip. Angelo Astone of GECS was on the trip for the inspection of Beijing, Xian and Li River. The plaintiff's dinners were scheduled in Exhibit 40 as "Dinner on own - Mr. and Mrs. Wendt." After concluding his business in Bangkok, the defendant immediately flew to Europe.
After a business trip, letters of thanks were written by the defendant discussing some portion of the business deal. Exhibit 51. The letters were prepared by GECS and signed by the defendant. The letters generally began "Lorna and I would like to thank you . . . ." The letters generally ended, "Lorna and I want to thank you for your gracious hospitality." In the middle of the letter there was discussion of a business matter that had been discussed at the dinner and the events surrounding the dinner. Therefore, it appears from these letters that the discussions that occurred at these business affairs were important to GE. It was important too that the GE wives be present. The plaintiff was not only included but was able to make conversation about the deal. Both the defendant and GE benefitted from the plaintiff's participation in this portion of the business done on these foreign trips. GE paid for the expenses of the parties on all these trips.
The court inspected Exhibit 49 labeled a typical travel folder containing "deal" information. The plaintiff would become familiar with these facts on the airplane trip and not before. This folder showed the itinerary, local culture, history, the background of the deal to be discussed, facts to refresh the defendant's memory and some minimal cultural information, i.e., status of women, the climate, and who the Wendts would be sitting next to at various meetings. These meal guests could include a finance minister or the president of a local bank. This travel folder contained three pages of itinerary along with a ten page memo prepared for the defendant's review by the local GE area representative. Plaintiff did not prepare any of these trip itineraries. She did assist in an occasional change of a Pinnacle Club itinerary after an inspection trip. There was no evidence of any correspondence between GECS local representatives, local business people or their spouses, and the plaintiff.
The ten page business summary is fact intensive and is couched in language which assumes prior knowledge of sophisticated foreign financial markets. At no time did the plaintiff offer any testimony to convince this court that she had any intimate knowledge of the "deals." Even a cursory reading of Exhibit 49 could not possibly make the reader conversant with the terms of the "deal." Despite offering at least a dozen exhibits relating to business trips in which the plaintiff participated, there was no testimony from any witness, including the plaintiff, of her knowledge of the business conducted on the trip. A number of post travel thank you letters were offered. Each one was addressed to the plaintiff and the defendant at GECS headquarters. The plaintiff offered these letters to show that she was involved in the transactions, but in fact they proved the opposite.
The plaintiff also believed that as part of her duties she had to be familiar with Business Week, Fortune and The Wall Street Journal. The plaintiff also read corporate annual statements. There was no testimony to indicate with what frequency she read business publications. The plaintiff did not testify as to any specific facts gleaned from those sources.
There was no indication from these documents whatsoever that the plaintiff negotiated the deals, assisted with the negotiations of the deals or furnished ideas for the betterment of GE. There was every indication that she was knowledgeable about the countries, knowledgeable about the people she was going to meet, the local GE employees and clients's families, and had sufficient knowledge of the business deals to be able to participate in a conversation.
In 1992 the parties made a joint decision to create the Wendt Family Charitable Foundation. Exhibit 88. The parties are co-trustees and as such signed the trust agreement. At the end of each year the Foundation approves the donations to various charities. The donation decisions are joint. It was also a joint decision as to the amount of money that would be put into the Foundation. The defendant is the grantor. There is no evidence that the plaintiff denoted money to the Foundation. The defendant's last gift to the Wendt Family Foundation was $50,000 on December 29, 1996.
On cross-examination the plaintiff revealed that she did not know the amount of the initial contribution. The plaintiff did not know the specific tax benefits or the purposes of the Foundation. The plaintiff had some idea of the charities supported, e.g., a gift to the University of Wisconsin on the defendant's twenty-fifth reunion, a twenty-fifth reunion gift to Harvard University, a major gift to the Stamford Boys and Girls Club, some local charities, their church and the American Heart Fund. Even though the plaintiff is a co-trustee, she had no knowledge as to the amount received or spent, or whether or not the funds were given from principal or interest or a combination thereof.
In discussing her Claims for Relief on direct examination, the plaintiff justified her claim for half of all the assets of the marriage on the following basis: "Marriage is a partnership, and I should be entitled to 50%. I gave thirty-one years of my life. I loved the defendant. I worked hard and I was very loyal." The plaintiff breaks down this claim into the following categories:
1. Length of marriage
2. Length of relationship
3. Emotional support
4. Abandonment of plaintiff's career
5. Her career as a GE wife
6. Marriage is a partnership
7. Raising the children
8. Providing a household
The plaintiff is aware that Connecticut is not a community property state. The plaintiff is also aware that in past Connecticut dissolution cases involving long term marriages and large assets the wife has not been awarded half. The plaintiff responds to this by saying that Connecticut is an equitable distribution state, and she feels that she is entitled to an equal division of the assets upon the considerations mentioned above.
The plaintiff also desired that the media be aware of this case. The less than 50% division concept in a dissolution is "foreign to her." The plaintiff felt incensed by this and "was hopping mad." The plaintiff believed "a woman's worth has value, a corporate wife has value, and she wants the public to know about it." The plaintiff denies that she is using the press to force Gary Wendt into a settlement.
The plaintiff also claims that she is aware of dissolution decisions in Connecticut, with assets between $2 to $5 million, where the courts routinely divide the assets 50-50 to corporate wives in long term marriages. The plaintiff believes that these decisions are incorrect, and that those women should be entitled to more than half.
On cross-examination the plaintiff testified that there was no evidence either in testimony or in any documents, that she prepared, signed or was referred to as the preparer of any document relating to any business transaction whatsoever with GECS. This included any correspondence or thank you letters for people she met on GECS trips. The plaintiff does concede that she made no financial contribution to the acquisition of any of the current assets of the parties. The defendant testified that he was "virtually responsible for the creation and value of the assets." The plaintiff claims that she did make nonmonetary family contributions. She states that the only financial help she made to the family were modest contributions while in Boston, her teaching in the first year at public school in music and part-time private music lessons. She admits that her parents paid for her education at the University of Wisconsin and that the defendant's parents paid for his education at the University of Wisconsin and at Harvard University.
The plaintiff's first full-time job was in January, 1966 at MIT in the industrial relations department. She worked full-time as a music teacher in the Sudbury, Massachusetts public school system, and part time teaching piano and as a church organist. The only other source of money that the plaintiff received during the marriage was an inheritance from her mother in 1981 in the approximate amount of $10,000. This is still invested in savings held as a current asset in the plaintiff's name, as shown in her financial affidavit. The defendant also received a family inheritance of an unknown amount. Neither party received any gifts during the marriage.
The plaintiff described her personal lifestyle as "absolutely first class." Substantial amounts of money, in the tens of thousands of dollars, were spent by the wife in 1996 in fine restaurants in Stamford and New York, a 1996 trip to Africa, an expensive trip to Antarctic, a trip to Canyon Ranch in Arizona with her son-in-law and daughter, trips to the theater in New York, and lunch or dinner three to four times a week. The African trip planned in December of 1996, cost $70,487.50, Exhibit 60. She paid for a number of friends, some of whom testified on her behalf.
The evidence seems to indicate the following for the lifestyle prior to 1996. The dissolution complaint was filed in December, 1995. There was no yacht, no second home, no live-in help, no help other than the cleaning lady three times a week in 1996 at $63 a day, no chauffeur, no cook and no expensive hobbies. The plaintiff plays tennis and music, sings and serves on boards, plays bridge and does needlework and sewing. There were modest club expenses. She is not a collector of rare things, antiques or art work nor is the defendant. There is no wine or rare book collection. The worth of the furnishings in the house is a modest $125,000. The children attended public school although the plaintiff and the defendant travelled in a luxurious style paid by GECS. They built a lavish house for some minimum in-house entertaining. All in all, throughout the thirty-one years of marriage, the parties lived a modest, conservative lifestyle.
Their lifestyle for many, many years was quite modest, and only recently, since the separation, has the plaintiff's lifestyle increased substantially. For example, there was no indication that the parties ever gave money to friends or spent lavishly on friends, the equivalent of which the plaintiff did by spending $70,000 on the 1996 African trip.
The plaintiff claims that the largest amount of earnings she made was $6,027 per year in the mid 1960's as a music teacher. When asked if the defendant ever asked the plaintiff not to pursue her music career, the plaintiff answered, "I don't remember." There was insufficient information to indicate what the plaintiff's current earnings would be as a music teacher if she continued on with her career. The plaintiff offered an expert witness to support her claim that she is entitled to a substantial distribution in the tens of millions of dollars by reason of giving up her career as a public school music teacher.
The defendant receives a substantial salary and bonus as CEO. He receives "dividend equivalents" on his restricted GE stock. In addition, he is provided a number of other valuable benefits by GE at no cost: travel,the use of a car and driver, security system and its monthly payments, new GE appliances every two years, 45% discount rights on Macy's credit card and an insured automobile lease. The court concludes that the defendant's earnings are more than adequate to pay for the sums set forth in the expense section of each party's financial affidavit. The defendant has excess income.
The defendant received an inheritance from his father's estate in an unknown amount. He did not receive substantial gifts from any source. The defendant came to the marriage with savings of $2,500. The wife came to the marriage with no money and received a $10,000 inheritance in 1981. Therefore, the court concludes that substantially all the assets of the parties were acquired through the defendant's employment and the investment of the net proceeds from his employment. The assets have appreciated over time. The principal holding of the parties is in various investments in General Electric Corporation common stock. It is impossible to determine the exact number of shares of GE stock since they are in various forms: vested stock options, unvested stock options, GE stock holdings, mutual funds and pension plans.
The parties separated on December 1, 1995. The complaint was dated December 19, 1995. GE stock traded on the New York Stock Exchange on that date at $72 per share. The court takes judicial notice that on May 12, 1997 GE stock split two for one. Therefore, the number of shares doubled and the published price decreased by half. GE stock traded on the New York Stock Exchange on November 21, 1997 at $72 per share. From December 1, 1995 through November 21, 1997 the value of General Electric Corporation common stock has doubled. |
