Gift to Spouse During the Marriage:  Husband transferring $1.5 million dollars from joint account to wife and not dealing with funds after transfer showed clear and convincing evidence that husband had donative intent to make gift to wife, thus making transfer wife's nonmarital property.  The dissent argued that, "The facts of this case are similar to those in both Davis, 215 Ill. App. 3d at 771-73, 576 N.E.2d at 49-51, and Leff, 148 Ill. App. 3d at 806-08, 499 N.E.2d at 1052-53, where the courts found the property was marital property. See slip op. at 6-7. Here, respondent testified he transferred the account into petitioner's name to protect the account from his pending malpractice lawsuits. See Leff, 148 Ill. App. 3d at 807-08, 499 N.E.2d at 1052-53 (finding a lack of donative intent where the respondent testified he transferred property to his spouse to protect it from a possible malpractice action). He anticipated the account would be returned to joint ownership when he retired. Contrary to the majority's finding, respondent continued to deal with the account after the transfer by depositing his paycheck into the account until the parties separated."

Date Marriage was Undergoing Irretrievable Breakdown May Have Occurred Significantly Before Date of Separation: Relying upon the Petrovich decision as to the date the marriage was undergoing an irretrievable breakdown, the appellate court noted that, “An irreconcilable breakdown of a marriage does not necessarily require a separation or a filing for divorce by one spouse.” The trial court established dissipation five years before the wife (who was charged with dissipation) filed for divorce where the parties had lived in the same house but not lived “as husband and wife.” This case involved a wife who appeared to have committed perjury regarding her failed attempt to secure control of her husband's estate via proceedings to have him declared incompetent before the separation. Further, a distribution of assets in the husband's favor (75/25 after consideration dissipation) was affirmed where the vast bulk of the estate was attributable to the husband's personal injury settlement received after he was rendered a quadriplegic. The court commented that it could rightfully consider that paralysis is the basis for a personal injury award when distributing marital property.

Trial Court Erred in Expansive Approach to Dissipation: This case involved a physician who was alleged to have dissipated property, and the appellate court reversed various findings of dissipation. For example, the trial court improperly determined that “hangar fees, repairs, maintenance, and paint for the marital twin-engine aircraft constituted dissipation. Unairworthy engines and corroded airframes render aircraft worthless. These were expenditures to maintain and preserve the value of a marital asset and could not constitute dissipation.” The appellate court further commented:

The trial judge found that the cost of numerous items - furniture and appliances, a ski boat, a computer, a tractor, and a utility trailer-constituted dissipation. Since all of the items were valued at cost and distributed to Maurice as his share of the marital estate, their cost could not constitute dissipation. The transfer of one marital asset to another marital asset is not dissipation. “In re Marriage of Hellwig, 100 Ill. App. 3d 452, 464, 426 N.E.2d 1087, 1095 (1981).”

The trial judge found that Maurice's withdrawal of $123,143 from the Schwab account was dissipation. This finding was based upon the conclusion that Maurice had failed to demonstrate that the funds were “used to preserve, enhance, or otherwise benefit the marital estate or provide necessities for the family.” Maurice paid $50,000 in taxes and deposited the remainder of these funds in his checking account. It appears that a lot of this money was spent on basic living expenses for Maurice, Margaret, and the three boys. Paying monthly support of $2,700 to his estranged partner out of the funds could hardly be dissipation. The payment of usual and necessary living expenses is not dissipation. “In re Marriage of Seversen, 228 Ill. App. 3d 820, 826, 593 N.E.2d 747, 751 (1992).”

If goodwill is not considered as part of a spouse's income-generating ability relative to a maintenance award, it may be considered in the valuation of a professional practice as a divisible marital asset. Accordingly, the trial court erred in not including personal goodwill in the valuation of the husband's dental practice. Note that the dissent suggested that the inclusion of personal goodwill in the valuation of the dental practice was duplicative because the goodwill was reflected in the child support award. To this the appellate court commented:

However, we note that Zells specifically states that personal goodwill is to be reflected in the maintenance and support awards. Zells, 143 Ill. 2d at 256. As such, Zells does not apply when a maintenance award has been waived. Consequently, if personal goodwill is reflected only in the child support award, an exclusion of this goodwill from the valuation of Earl's dental practice would result in an unfair and unjust distribution of marital property. The Act specifically provides for an equitable distribution of all marital property upon dissolution of marriage. See 750 ILCS 5/503 (West 2000). Therefore, since the personal goodwill in Earl's dental practice cannot be reflected in a waived maintenance award, the inclusion of goodwill in the valuation of his dental practice as a divisible marital asset is not duplicative. Furthermore, in determining the value of a professional practice the trial court should value accounts receivable as well as fixed assets of the business such as cash, cash surrender value of life insurance policies and loans to officers.

I anticipate that the business owner's attorney will seek that this case be reviewed by the Illinois Supreme Court.  I further anticipate that the Illinois Supreme Court would accept a petition for leave to appeal.  If I am correct, then there are a number of questions as to any potential review by the Supreme Court.  One of the critical pieces of evidence in this case was that the total purchase price for the practice was $550,000 paid by the husband.  The dentist from whom the husband purchased the business continued to work at the business for 2.5 years and there was a covenant not to complete.  The husband did not lose any of the dental patients after purchasing the business. 

Schneider involved the valuation of the husband’s dental practice in a case where the wife waived her rights to maintenance at trial but sought and obtained a disproportionate share of the marital estate. In this case the husband’s expert opined that the value of the dental practice other than goodwill was $35,000 in fixed assets including property and equipment but excluded cash on hand, accounts receivable, cash surrender value of life insurance policies and loans due from officers. The wife’s expert, Bruce Richman, estimated the fair market value of the dental practice at $481,000. Mr. Richman included the cash, accounts receivable, and cash surrender value of insurance. He opined that the value of goodwill of the business was $336,587. The trial court valued the husband’s dental practice excluding accounts receivable, cash on hand, cash surrender value of life insurance and loans due officers. Furthermore, the trial court found that no enterprise goodwill was proven and that therefore any goodwill was personal which should not be included in the fair market value of the dental practice. In awarding the wife 67% share of the marital estate, the trial court weighed most heavily certain statutory factors in Section 503(d) of the IMDMA: (4) the duration of the marriage; (10) whether the apportionment was in lieu of or in addition to maintenance and (11) the reasonable opportunity of each spouse for future acquisition of capital assets and income.

The majority opinion commented upon the dissents argument that because there was a child support award, there was improper double-dipping under the reasoning of the Zells case. In response, the majority urged that under the language Zells emphasizes that personal goodwill is to be reflected in the maintenance and child support award (emphasizing the use of the conjunctive.) The appellate court stated, “If personal goodwill is reflected only in the child support award, an exclusive of this goodwill from the valuation of [the husband’s] dental practice would result in an unfair and unjust distribution.”

The dissent in Schneider emphasized its disagreement with the majority because the case involved an award of child support. However, the opinion noted that in waiving maintenance the wife reserved her right to seek a disproportionate share of the marital estate. An additional statutory factor the trial court considered in making the 67% distribution of the marital estate to the wife was the future income producing ability of each party. Therefore, the dissent urged that husband’s income generating ability would have been considered by the trial court’s award.

What was noteworthy was that neither the majority nor the dissent concentrated on the reasoning of the Talty Supreme Court decision. Perhaps this was because Talty did not involve the valuation of a professional practice. Nevertheless, the reasoning of Talty, as is discussed above, was that the double dip addressed by Zells was endemic to the statutory factors the court uses in dividing property.  I predict a reversal by the Illinois Supreme Court.

Court May Consider Worker's Compensation Benefits Both as Property for Settlement Purposes and as an Income Stream but May Not Consider Entire Award as Both: The trial court originally calculated respondent's child support obligation on the assumption that he was receiving approximately $1,490 per month in TTD. Later, there was a lump-sum payment intended to replace that income. However, the support obligor received only half of the lump-sum award because the trial court awarded petitioner 30% of the sum as marital property and set aside another 20% to create trusts for the children's educations. The support amount remained unchanged. The case states:

In other words, respondent received only half of the worker's compensation settlement, but continued to pay child support as if he had received the entire amount. As a result, the settlement proceeds were nearly exhausted by the time respondent filed his motion to reduce support. While Dodds holds that a worker's compensation award may be considered income to the receiving spouse, it presupposes that he receives the entire award. Where, as here, a settlement is apportioned as marital property under DeRossett, “it follows that a child support award based on that settlement must be reduced proportionately.

Therefore, “Under the circumstances of this case, the court committed an impermissible ‘double counting’ of the settlement proceeds. See In re Marriage of Talty, 166 Ill. 2d 232, 236 (1995). Furthermore, if the court imputed income to the Defendant, the court must make express findings.” Therefore, the appellate court vacated the judgment and remanded the matter.

Unforeseen Increases in Pension Benefits – Early Retirement Incentive and 2.2 Upgrade – Should be Shared between the Parties Based upon a Coverture Formula: Ramsey considers the impact of a teacher's choice to take advantage of an early retirement option. A teacher avoids the 6% per year penalty for retirement prior to reaching age 60 or earning 34 years of creditable service. To do so, if the teacher is at least age 55 and has 20 years of creditable service, he or she contributes 7% of his highest annual salary multiplied by the smaller of the numbers of years until age 60 or the difference between the number of years of service and 35. The teacher could also choose the “2.2 upgrade” offered by the Teacher Retirement System. Under the 2.2 upgrade system, a one-time contribution allows a teacher to receive 2.2% of his average salary multiplied by his total years of service rather than 1.67% of average salary for the first ten years of service; 1.9% multiplied by the next 10 years of service; 2.1% multiplied by the third ten years of service; and 2.3% multiplied by any years of service greater than 30. (See 40 ILCS 5/17-116(b)(1). In this case the ex-husband made a one-time lump-sum payment of $7,397.46 for the early retirement option and a payment of $6,390.60 for the 2.2 upgrade. His employer, the Century Unit No. 1 School District, made a one-time contribution of $35,226 for the early retirement plan on his behalf. The former husband argued that he purchased the early retirement option and the 2.2 upgrade with his postdissolution earnings and that, therefore, the ex-wife should not be entitled to any portion of his pension attributable to these early retirement incentives. The ex-wife urged that the court should mechanically apply the formula, that is the number of months of benefits accrual during the marriage (234) over the total period of benefit accrual times 50%.

This case of first impression holds that the Illinois Supreme Court's Strukoff decision, 76 Ill 2d 53, 389 N.E.2d 1170 (1979) does not prohibit trial courts from exercising equitable powers consistent with the IMDMA by relying significantly on the Tollison decision, 208 Ill.App.3d 17, 20, 566 N.E.2d 852 (1991). Next, the court comments:

[F]or the most part, Illinois courts have rejected the argument that nonpensioner spouses are only entitled to an amount determined by applying the proportionality formula to the pension their former spouses would have received had they retired upon dissolution rather than the pension they actually receive when they retire after dissolution.

The decision states, “Given that the parties necessarily share these inherent risks when the division of pension is postponed, it is only equitable that they share in the benefits of unforeseen increases in the value of the pension as well.” After reviewing case law on the issue of early retirement incentives from around the nation, the decision concludes, “We can think of no principled way to detangle the portion of these enhancements attributable to John's efforts during his career (60% of which was marital) from that attributable to the lump-sum payments he made. Thus, we think the most rational and equitable way to do justice to both parties is to require Mary to pay her proportionate share of the contributions necessary for John to qualify for the enhancements.” The ex-husband “lost” this case because it was somewhat of a close question as to whether the denominator of the equation should have been increased by five years. Curiously, the appellate court suggested, “Further, because the school district paid five-sixths of the monetary contribution that eliminated the early retirement penalty, *** we think [the ex-husband's] contribution only bought 4 additional months, the remaining 20 being bought by the school district's contribution.”

The case concluded, “when an early retirement incentive enhances pension benefits, to the extent that such enhancements are derivative of the right to receive the pension as deferred compensation, the proportion of the enhancement that is marital property is exactly the same as the proportion of the pension as a whole that is marital. In the unusual case where the entitlement to such enhancements is not purely derivative, however, that portion of the enhancement not derived from the right to receive the pension itself is the pensioner's sole property. We note that because early retirement incentives come in a multitude of forms, the decision we reach concerning the most equitable method of apportionment in the circumstances present in the case at bar may not be the most equitable or logical method in all cases where this problem arises. We therefore decline to hold that trial courts must always apportion partially derivative pension enhancements through requiring reimbursements.”

IRMO Nielson, 341 Ill.App.3d 386, 275 Ill.Dec. 369, 792 N.E.2d 844 (2d Dist. 2003), GDR 03-84.

Military Retirement Pay Reduction to Collect Disability Benefits: The ex-husband was ordered to indemnify his ex-wife for the amount of diminution of the military pension benefits she received from him after he unilaterally reduced the amount of his military pension benefit to collect disability benefits. This case is significant and relied upon several out of state cases in reaching its conclusion.

QDRO Amendments Versus Modification of Property Settlement Agreements – “"Measure Necessary to Enforce a Judgment”: The divorce judgment divided a Commonwealth Edison defined benefit plan using a formula dividing the:

Plan benefit, including any early retirement incentive, or survivorship benefit, multiplied by one-half (½) and the product thereof multiplied by a fraction, the numerator of which is 216 and the denominator of which is the number of months during which any contributions to the plan were made for the benefit of Participant, up to the time when benefits are requested.

The decision stated that the number 216 was understood to be the number of months that the parties were married (rather the benefits accrual during the marriage). The QDRO entered within a month of the divorce provided that the alternate payee would receive:

50% of the vested benefits accrued by Participant under the Plan as determined as of October 6, 1995, multiplied by a fraction, the numerator of which is the number of months the Participant and Alternate Payee were married (i.e. 170 months) and the denominator of which is the number of months during which the Participant accrued benefits under the Plan as of October 6, 1995. (This language was actually mistaken because 170 represented the months of benefits accrual during the marriage).

The change of the numerator of the fraction from 216 to 170 was required due to the mutual mistake of the parties in the original judgment that the numerator should be the total length of the marriage, rather than the number of months during the marriage in which the respondent collected benefits under the plan. Once the benefits went into pay status, the ex-wife/alternate payee sought to amend the petition to amend the QDRO to reflect the formula in the judgment. The trial court granted the ex-wife's motion and the appellate court affirmed. The appellate court stated, “Although no case law directly addresses the issue, existing authority hints that the modification of a QDRO is allowed after the time for modification of judgments has passed.”

The appellate court had to decide whether to glean the parties' intent from the QDRO or the provisions in the divorce judgment. The appellate court ruled that the parties' intent is determined by the divorce judgment and not the QDRO. The appellate court held it was proper for the, “trial court to enter an amended QDRO to correct the formula used to divide the respondent's pension when the formula in the original order did not conform to that contained in the judgment. The entry of the new order was not a modification of the judgment, which the trial court no longer has jurisdiction to do after 30 days from entry, but was rather a measure necessary to enforce the judgment, an act subject to indefinite jurisdiction. We also find that the original judgment was unambiguous and that the trial court properly refused to hear parol evidence concerning the alleged true intent of the parties.”

Parties' MSA and Divorce Judgment Which Pooled Social Security Earnings Following 46 Year Marriage was Void: Illinois' case of first impression, the Second District appellate court ruled that the state court lacked jurisdiction to divide social security benefits (by pooling the benefits and providing for an equal division) due to the anti-alienation provisions of the Social Security Act. Therefore, the trial court improperly treated the benefits as marital property and the court's judgment in this regard was void. The matter was remanded to the trial court to divide marital property eight years after the end of the 46-year-marriage. The potential for post-remand litigation could have presented a quagmire as contemplated by the court:

[T]he parties use and consumption of the marital property during the past eight years would make a redistribution of the entire marital estate nearly unworkable.... If the parties cannot reach agreement on remand, the trial court may consider the accrued but unpaid social security benefits when redistributing all of the marital assets equitably. See IRMO Crook (4^th Dist. 2002).

Note that we are waiting for the Illinois Supreme Court's review of the Crook decision. The appellate court in Crook stated:

This division of marital property is inequitable and we therefore find the court's failure or refusal to consider petitioner's anticipated social security benefits amounted to an abuse of discretion. Upon remand, the court must consider the fact petitioner expects to receive a substantial social security benefit and fashion a division of respondent's pension benefits that will place each party in similar financial situations.

IRMO Gaumer, 336 Ill.App.3d 1012, 785 N.E.2d 122, 271 Ill.Dec. 471 (5th Dist. 2003), GDR 03-22.

84/16 Property Division Approved for 40+ Year Marriage with No Maintenance: In a marriage of more than 40 years, with a 66-year-old wife and a 69-year-old husband, both of whom were unemployed, the trial court did not abuse its discretion in awarding 84% of the property to the wife with no maintenance, where the wife would likely outlive the husband. The critical fact in this case was that the court awarded the husband his entire pension which was approximately 70% marital and yielded $18,745 yearly. It appears this was a unique case in which the wife waived survivorship benefits before the husband's plan went into pay status. For this reason, the court commented that, upon the husband's death, the wife would receive nothing via the pension. The decision stated, “an equal division of the pension is not truly equal because it remains dependent on [Mr. Gamer's life. In the event he would pass, it would result in a sudden decline in Mrs. Gamer's financial status without any doing on her part.”

DNA Test Proving Non-paternity Can Overcome Conclusiveness of a Voluntary Acknowledgment of Paternity: A presumed father who signed voluntary acknowledgment of paternity may challenge the voluntary acknowledgment under §7(b)(5) of the Illinois Parentage Act of 1984 if subsequent DNA results establish non-parentage. In this case, Smith signed the voluntary acknowledgment two days after the child's birth. 4.5 years later, he requested DNA testing on himself and the child since he had doubts about the child's paternity because the child did not share his physical characteristics. The testing showed a 0% probability of Smith being the child's biological father. Later, Smith filed a verified amended complaint to establish non-paternity pursuant to §7(b-5) of the Act. The trial court dismissed the complaint finding that §5(b) of the Act renders a voluntary acknowledgment of paternity conclusive unless the acknowledgment is rescinded within 60 days under the process provided in §2 of the Vital Records Act (410 ILCS 535/12). Smith appealed and the Second District appellate court reversed and remanded.

*** Note: § 7(b-5) does not authorize an action to be brought absent DNA testing, nor does it provide for a mechanism compelling the mother and child to undergo DNA testing. Therefore, a presumed father who has proven his non-paternity through DNA testing may challenge the voluntary acknowledgment he had previously signed under §7(b-5) of the Act.

Married Party's Right to Parentage Testing: A party who is married has an absolute right to parentage testing pursuant to §7(b-5) the Illinois Parentage Act of 1984.

Petition for Name Change of Minor Child Requires Actual Notice and 21-103(b) of the Code is Unconstitutional to the Extent it Provides Otherwise: This case was a case of first impression addressing the fact that the Illinois statutory provisions for name change do not require actual service of notice upon the non-custodial parent. The case stated,

[W]e hold that a non-custodial parent is entitled to actual notice of proceedings to change his or her child's name. Additionally, we agree with Tubbs [620 P.2d 384, 386 (Okla. 1980] that a non-custodial parent is entitled to that notice as a matter of due process, especially when that parent's whereabouts are known or readily ascertainable and the parent is exercising visitation rights and paying child support. Furthermore, we hold that §21--103(b) of the Code is unconstitutional to the extent that it allows a custodial parent to change the name of his or her child without actual notice to the non-custodial parent.

Religious Education -- Party has Right to Take Children to Church of Choice Absent Showing of Harm:  A court will not prohibit a non-custodial parent from taking a child to church, or teaching the child religious practices, when neither evidence of religious doctrinal differences nor harm to the child is presented.  The case states, "Consistent with our decision in Tisckos/Stewart and other relevant authority, we hold that section 608 of the Dissolution Act permits the custodial parent to control the child's religious upbringing absent proof that involvement in any other religion is not harmful to the child. Trial courts have the authority to set forth accommodations during lawful visitation periods with a showing that such accommodations are necessary to eliminate or prevent any harm to the child and are in the child's best interest. Absent proof of harm or that attendance at religious services with the noncustodial parent somehow interferes with the custodial parent's selection of the child's religion, the noncustodial parent is entitled to his or her visitation period without interference from the custodial parent despite the authority granted to the custodian in section 608 of the Dissolution Act."

If Child's Representative Testifies Based upon His Own Observations, the Representative has Become a Witness and May be Examined. Furthermore, Rep. Shall Disclose Underlying Factual Matters Underlying Recommendation (such as Witnesses and Third Party Investigators: The significant issue in this case, in which the court terminated the joint parenting agreement and awarded sole custody to the mother, was the constitutionality of the provisions of §506(a)(3) of the IMDMA regarding the role of the child's representative. § 506(a)(3) states: “The child's representative shall not be called as a witness regarding the issues set forth in this subsection.” The appellate court first noted two situations which might present issues where the representative “might act as an advocate for the child” First, the representative might advocate based upon information provided by investigators or witnesses. To this, the appellate court reasoned, “Under the express terms of §506(a), a party can request the court to condition any recommendation of the child representative on revealing any factual sources underlying that recommendation, such as witnesses or third-party investigators, so that those individuals may be examined by the opposing party.” Second, the child representative might advocate based upon his own observations as a direct witness. The appellate court suggested:

In the event the child representative directly witnesses relevant facts and circumstances that are used to support the recommendation, then the child representative has stepped out of his attorney role and has become a witness who may be called and questioned at trial as any other witness under the terms or specifications as determined by the court. We do not read the prohibition against being called as a witness to be inconsistent with such an approach. We believe §506(a) contemplates such a hybrid role for a child representative. Having interpreted §506(a) to allow a party to request disclosure by the child representative of underlying factual matters or to cross-examine the child representative in those instances where he acts as a witness, we hold §506(a) does not deny a party procedural due process and is not unconstitutional as contended.

The appellate court also contended that interpretation may somehow be reconciled with Rule of Professional Conduct 3.7 which generally prohibits an attorney from being both a witness on behalf of his client and an advocate. The appellate court urged that in these circumstances, the court could appoint an additional attorney to represent the child on that limited basis to avoid a conflict with Rule 3.7.

The appellate court then reasoned it was error not to grant the request to have the representative testify – “to the extent that the recommendation was based upon his own observations as a witness.” Surprisingly, however, the appellate court considered the error harmless because the trial judge suggested that it was considering the report “for what it was worth” and then suggested, “if it looks like it's things I should consider, I will, and if it looks like it's way out on a limb, I'm not going to.”

***
Practice Tip: A good web site which reviews the role of the child's representative, the attorney for the child and a GAL is the Cook County Public Guardian's web site.  Note that there are corresponding provisions of the Illinois Parentage Act of 1984 relating to the role of the child's rep. at (§18(a-5)). It appears that the First District will shortly address the constitutionality of this issue. There was also a very well reasoned article in the ISBA family law section newsletter addressing this entire issue. (January 2003).

***

Alienation of Child Factor in Custody Modification Award to Father: An award of a petition to terminate joint custody, or a motion to modify custody, which is later denied by the court, is not a custody judgment triggering the two-year non-modification provision in §610(a) of the Illinois Marriage and Dissolution of Marriage Act. In this case the mother's denial of father's visitation, denial of telephone contact, and making disparaging remarks about the father in child's presence were bases to transfer custody to father. This case conflicts with Ehr v. Ehr, 77 Ill.App.3d 540, 33 Ill.Dec. 11, 396 N.E.2d 87 (2d Dist. 1979): “It has been generally held that the custody of the child should not be awarded because of one parent's conduct in regard to the court orders or visitation rights.” Cases contrary to this general rule include:

IRMO Ricketts, (2nd Dist. 2002) GDR 02-47: A child custody transfer was warranted where evidence established that the mother failed to foster a close and continuing relationship between the child and the father by repeatedly interfering with the father's visitation schedule, and the mother did not facilitate a calm and positive environment for the child during visitation exchanges, and the mother's making derogatory remarks concerning the father and his family in the child's presence.

IRMO Divelbiss: 308 Ill.App.3d 198, 241 Ill.Dec. 514, 719 N.E.2d 375 (2d Dist. 1999) GDR 99-100: The custodial mother's failure to facilitate and encourage the relationship between father and child, denying visitations to father, filing of unsubstantiated reports of abuse to DCFS with the assistance of her current husband, and involvement of the child in “staging” volatile visitation exchanges warranted a transfer of custody under §610(b) of the IMDMA.

IRMO Kramer: 211 Ill.2d 401, 155 Ill.Dec. 909, 570 N.E.2d 422 (1st Dist., 4th Div. 1991) GDR 91-40: Child custody may be transferred when the custodial parent's conduct may be viewed as a comprehensive scheme to deny the non-custodial parent any type of relationship with the child and the transfer of custody is in the best interest of the child.

IRMO Smith: 170 Ill.App.3d 681, 121 Ill.Dec. 331, 525 N.E.2d 137 (5th Dist. 1988) GDR 88-49: Custody of the child was transferred from mother to father when mother did not allow visitation.

Dismissing Petition to Modify Custody was Error When Because Change of Circumstances May Include Situation Which Creates Instability for the Child if Original Parenting Plan Followed: Joint parenting agreement entered when child was three years old, which provided each parent equal parenting time, was modifiable based on change in circumstances when parties could not agree on which school the child would attend when she entered kindergarten. As to the relatively vague assertion that there was a substantial change of circumstances, the appellate court stated, “In other cases, the inherent instability of the custody agreement creates a situation where modification is in the child's best interests, even if it is difficult to find a precise change in circumstances.”

Compliance with Void Out of State Order No Excuse for Failure to Follow Order of Illinois Court where Illinois was Court with CEJ under UCCJA: Party was appropriately held in contempt for complying with an out of state order which was void because it did not adhere to the terms of the UCCJA, where Illinois had continuing exclusive jurisdiction because one of the parties continued to reside in Illinois. The court's purge of allowing visitation (despite the same being contrary to the terms of the void our of state order) was proper. An interesting quote stated, “What she may not do is unilaterally select another forum where she deems she will have a better chance of success.”

Final and Appealable Orders in Custody Cases Where Reserved Issues and Timing for Custody Modification Re Permanent Custody Order versus Final and Appealable Judgment: (1) Parties shall file § 2-1203 posttrial motions (such as motion to reconsideration or for rehearing) following a trial of a permanent custody order, even though a final appealable dissolution judgment has not yet been entered.  (2)  § 610's two year requirement on petitions to modify custody absent affidavits showing serious endangerment starts to run when the trial court enters a permanent custody order, regardless of whether the order is entered at the same time as the final judgment or earlier in the divorce proceedings.  (3) Dictum:  "We strongly urge trial courts to notify the parties on the record when a child custody determination is intended to be a permanent custody decision."

Illinois Supreme Court Rejects and Reverses Second District's Refusal to Consider Indirect Benefits: The Illinois Supreme Court ruled that the Eckert factor of removal benefitting the child can be an indirect benefit and does not have to be a direct benefit, thus reversing the position held by the Second Appellate District. The critical factor in this case was the remarriage of the mother. The case stated, “Second, requiring a parent seeking removal to establish that the child would “directly” benefit from the move, to the exclusion of any “indirect” benefits experienced by the child, would mean that the remarriage of a custodial parent would rarely, if ever, provide a valid basis for removal."  Requiring the custodial parent to meet such a heavy burden of proof would not only de facto eliminate the balancing process set forth in Eckert, but also impermissibly “allow a noncustodial parent who enjoys a good relationship with his child to veto the good-faith and reasonable desire of the custodial parent to remarry and move out of State without any consideration of what have been called the ‘indirect benefits’ to the child.”

Application of Eckert Factors Post-Collingbourne:  Trial court must weigh and balance the relevant Eckert factors with the facts of each case and not demand compliance of every factor when determining whether removal is in the best interest of a child under IMDMA section 609. 

Removal Provisions Supposedly Applied to Situation Where Custodial Parent was to Move to State where Non-Custodial Parent Lived after Certain Number of Years: A November 2000 marital settlement agreement incorporated into a divorce judgment provided that the father was to have custody in Illinois but would join the mother in Colorado by September 2002. After the father's remarriage, he filed a petition requesting that he not be required to move. This Fourth District decision stated, “While §609 does not expressly govern the current situation, the petition addresses a potential out-of-state move, and thus we find §609 of the Act contains the applicable standards...

Although the trial court found this case was a modification of custody under §607(c) of the Act, the trial court noted the question presented was “whether the best interests of the parties['] children would be served by remaining in Illinois or moving to Colorado.” That question is the same one the trial court would have addressed under §609 of the Act. See Eckert, 119 Ill.2d at 325, 518 N.E.2d at 1044 (in removal cases, the paramount question is whether the move is in the child's best interests). Accordingly, we find that, while the trial court applied the wrong statute, it did not apply the wrong legal standard.”

Test for Determining Whether Father May Petition for Grandparent Visitation During Military Tour of Duty is Special Circumstance Test: Where parent who is in the military petitions to permit his family to have continued visitation with his son during his tour of duty, the trial court should not have had his petition dismissed under 2-619(a)(1) of the Code (subject matter jurisdiction). Because the provisions §607(b)(1) and (b)(3) of the IMDMA were determined unconstitutional (grandparent visitation provisions) in Wickham v. Byrne, the law returns to how it was before the enactment of the statute. Illinois law before the enactment of the grandparent visitation provisions would have allowed the father to receive the relief that he was seeking, see Solomon v. Solomon, 319 Ill.App. 618, 621 (a case involving grandparent visitation under special circumstances in World War II, consistent with the goals of the Soldier's and Sailors' Civil Relief Act of 1940). The court distinguished Wickham because it involved the grandparents seeking grandparent visitation within their own capacity. Thus, the court stated, “As such, unlike Wickham, this case does not involve a judge deciding what is in the best interest of a child between a fit parent and a non-parent. Instead, this case involves the trial court's weighing the wishes of two fit parents to determine what is in the child's best interest.”

***  However, note that the Illinois Supreme Court has implicitly reversed this case in M.M.D.

Are There Any Common Law Rights to Grandparent Visitation?  The appellate court approved of the following language from the grandparent's brief:  "This court should therefore allow Illinois courts to exercise common law jurisdiction in non-parent visitation cases so long as the decision making process avoids the constitutional infirmities which the courts found in Troxel, Lulay and Wickham . *** [Courts] should be free to continue to develop, on a case-by-case basis, standards for non-parental visitation that avoid [such] infirmities ***. " (Emphasis supplied.)   The appellate court further stated, "We agree with this statement but advise that the Wickham bar is quite high. As noted above, the Supreme Court declared that " [s]tate interference with fundamental parental childrearing rights is justified [only] in limited instances to protect the health, safety, and welfare of children. " Wickham , 199 Ill. 2d at 317. Accordingly, the appellate court held, "that the unconstitutionality of subsections 607(b)(1) and (3) does not void the Duncan's visitation rights as a matter of law. However, as a matter of fact, the visitation order must pass scrutiny under the principles articulated in Wickham."  The dissent was well reasoned.  It stated, " The majority even admits that "the constitutional principles outlined in Wickham apply to grandparent visitation in general." Slip op. at 6. Yet the majority nevertheless concludes that grandparent visitation is authorized under the common law. Surely, the majority is not suggesting that the courts may, under the guise of common law, do what has been explicitly disallowed by Wickham?  The visitation agreement in this case was entered into based on a void statute and is therefore also void. It infringes on Johnson's fundamental right to raise his child and cannot be retroactively legitimized by reliance on resurrected common law principles. I dissent."

Update:  Note that the discussion immediately above sided with the dissent.  As anticipated, the Illinois Supreme Court rejected the conclusion of the majority -- that the common law "special circumstances" test exist post-Wickham.  See Illinois Supreme Court's November 18, 2004 decision. 

Definition of Dating Relationship under IDVA: A single date does not constitute a “dating relationship” because a dating relationship under the IDVA is an “intimate” relationship or a “serious courtship.” This construction was based in part upon the fact that the IDVA serves a penal construction and, as such, it should be strictly construed in favor of the accused. The appellate court commented in reversing the trial court, “the relationship was brief and not exclusive.”

Emergency Order of Protection Should Not Have Granted Exclusive Possession of Marital Residence Based upon Conclusory Allegations: The trial court should not have entered emergency order of protection including an award of exclusive possession of the marital residence because the IDVA requires consideration of,

[T]he immediate danger of further abuse of petitioner by respondent, if petitioner chooses or had chosen to remain in the residence or household while respondent was given any prior notice or greater notice than was actually given of petitioner's efforts to obtain judicial relief, outweighs the hardships to respondent of an emergency order granting petitioner exclusive possession of the residence. 750 ILCS 60/217(a)(1)(ii)

The case stated:

Thus, the court must consider both the hardship to the respondent and the danger of further abuse. This is not to say that a petitioner must meet some specific burden of showing that further abuse is likely. For instance, it would not necessarily be error for a court to issue an emergency order for exclusive possession of the residence solely on the basis of the petitioner's subjective impression that the respondent's state of mind made further abuse likely. The court is merely required to consider both the factors to be balanced, and therefore must have information relevant to both factors before it. In this case, the court made some inquiry into the potential hardship to respondent, but elicited no information relevant to the likelihood of further abuse. The petition itself was likewise devoid of such information except for the conclusory statement: ‘Both parties have the right to occupancy; and, considering the risk of further abuse by Respondent interfering with the Petitioner's safe and peaceful occupancy, the balance of the hardships favors the Petitioner because of the following relevant factors: Availability, accessibility, cost, safety, adequacy, location and other characteristics of alternative housing for each party and any minors or other dependents’. This is a conclusion for the court, not petitioner.

An emergency sufficient to evict a person from a residence does not exist simply because there has been physical abuse in the past. It is noteworthy that, while the case was deemed moot, the appellate court published the decision under the public interest exception.

Maintenance Award of 20% of Net for 10 Years Which Did Not Equalize Incomes Affirmed Despite 33 Year Marriage:  Maintenance award to wife of $1,600 monthly for ten years affirmed in a case involving a 33 year marriage. Wife's request for $3,750 monthly maintenance, purportedly to equalize parties' incomes, would adversely affect husband's ability to meet his own needs.  The wife received 52% of the marital assets valued at $346,495. The husband's monthly net income from all sources, including interest and dividend payments per his affidavit was $7,973.

Trial Court Properly Modified Rehabilitative Maintenance Award to Provide for Permanent Maintenance: Trial court was affirmed when post-judgment maintenance review in which $100 per week rehabilitative maintenance resulted in $1,400 per month permanent maintenance because wife could not support herself commensurate with the standard of living established during the marriage despite having two jobs. § 510 of the IMDMA adds a new provision, §510(a-5), regarding the standards to use in modification of maintenance. The discussion of the case law as to the ability of the trial court to change the character of the award is significant.

The husband relied upon In re Marriage of Cantrell, 314 Ill. App. 3d 623, 732 N.E.2d 797 (2^nd Dist. 2000). In Cantrell, the wife was awarded rehabilitative maintenance to be reviewed after four years. At the scheduled maintenance review, the trial court extended maintenance for two years, subject to review at the end of that time. At the second review hearing (after two years had elapsed), the trial court awarded the recipient permanent maintenance despite the fact that she had merely requested a continuation of rehabilitative maintenance. The Second District appellate court vacated the award of permanent maintenance, holding (along with other reasons) the trial court erred in exceeding the relief requested in the former wife's pleadings. The appellate court was instructive when it stated:

When trial courts set review hearings, it would be preferable for the court to advise the parties who has the burden of going forward, who has the burden of proof, and what issues will be addressed. For example, if time-limited maintenance--whether temporary or rehabilitative--will continue only if the recipient shows good faith in seeking education or employment or proves the need for continued maintenance, then the parties should be so advised. Neither party should be required to guess what the court will consider at the review hearing. If pleadings are required, that should be noted as well. In this case, the parties agreed no further pleadings would be necessary.

It was not error to set child support at $8,000 monthly which was an amount significantly below the guidelines but far in excess of the shown needs when in 2001 the father earned $1.4 million, in 2002 his increased 10% to 20% and beginning November of 2003 he would begin earnings $4.5 million annually.  The parties had calculated the father's net income in 2001 and the mother urged that guideline support at the time would have been $13,946 monthly while the father urged that his guideline support would have been $12,905 monthly.  The appellate court also affirmed the result despite the argument that it may result in a windfall to the child by another relationship living with the mother. Additionally, the appellate court approved the requirement of the father to pay 100 of non-covered medical expenses despite the significant support award as well as 100% of the mother's attorney's fees.

Post-18 Support Until Graduation from High School Requires Compliance with §513 and 510(a) of the IMDMA: Where the underlying support order only provided for support while the child was a minor (i.e., through the date of the child's 18th birthday), a post-judgment extension of child support to provide for support for an 18-year old until the child graduates from high school is a modification of support and requires compliance with IMDMA §510(a) (modification requiring a showing of a substantial change of circumstances) and §513(a)(2) (support for non-minor children and educational expenses). Language to note from the decision states, “In short, if the child has attained majority, the trial court must turn to §513 when deciding whether to award support for that ‘nonminor child’.”'

Income Averaging Approved and No Deviation from Guidelines Where Gross Average Income $214,000: (1) Income averaging for three years approved despite having no broad fluctuation in annual incomes. (The appellate court found the husband's 1998 net income of $240,034, 1999 income of $237,897 and 2000 income of $164,836 “varied significantly from year to year.”) (2) Child support set in accordance with statutory guidelines may exceed obligee's monthly household expenses because child's entitlement to child support is not limited to child's needs.

Modification of Unallocated Support and Evidence of Fraud as to Income: (1) Non-modification clause in marital settlement agreement does not preclude modification of unallocated child support and maintenance. (2) Evidence regarding settlement may be introduced to prove husband's fraud in regard to his true income.

Determine Post-Decree Support Based upon Exemptions Actually Used: When calculating net income, the court should examine the obligor's exemption withholding status at the time modification is sought, rather than at the time of the original judgment. Note, however, that this case should be considered in conjunction with case law requiring consideration of the tax impact of a potential new spouse – which may be quite difficult to determine.

Military Retirement Benefits May be Used to Satisfy Support Arrearage: Public policy in Illinois ensures that child support judgments are enforced by all available means; thus, military retirement benefits may be turned over to satisfy an arrearage in child support. The issue was whether 735 ILCS 5/12-1006, which exempts retirement plans from judgment enforcement, should prevail over the IMDMA §505 provision making retirement income a child support source. The Murphy court cited In re Support of Matt, 105 Ill.2d 330, 85 Ill.Dec. 505, 473 N.E.2d 1310 (1985), which allowed income from a testamentary trust to be reached for child support.

Second District Misguidedly Rules that Support Arrearage QDROs Are Limited to Amount of Benefits in Existence at Time of Original Judgment: In a case that went to hearing in 2002, where the child support obligor's 1984 income was pertinent to establishing arrearage in child support ($650 per month or 35% of payor's net income – whichever was greater), and the 1984 income tax returns were not available, the trial court abused its discretion in refusing to consider the figures for the obligor's 1984 income based upon the Social Security Administration records. Child support arrearages may be enforced through the entry of a Qualified Domestic Relations Order (QDRO). However, the appellate court incorrectly held that the funds per the child support QDRO limited the amount of benefits in existence at the time of the original judgment. The appellate court did this based upon its mistaken reading of Smithberg v. Illinois Municipal Retirement Fund, 192 Ill. 2d 291, 303 (2000), when it commented that, “However, the value of the assignment should not exceed the value of the retirement accounts at the time of the marriage dissolution because only that ‘beneficial interest was acquired during the marriage.’” Smithberg was a case in which the Supreme Court commented that based upon numerous cases, etc., there is no question that pension benefits (even those acquired under the Illinois Pension Code) are marital property to the extent that the “beneficial interest” was acquired during the marriage. It was a case which applied equitable principles so as to allow the first ex-wife to receive the death benefits she was ordered to have received under the terms of the divorce judgment.

Post-Decree Final and Appealable Orders – Child Support and Contempt Are One Proceeding: A trial court post-judgment ruling increasing child support is not appealable, even with a Rule 304(a) finding, when the issue of contempt for failure to pay medical bills remains pending. This Second District holding disagrees with the First District's 2001 ruling in Carr, 323 Ill.App.3d 481 (2001).

Fee Award Against Own Client Not Final Until after Divorce Despite Language of Statute -- Accordingly, Fee Award Cannot be Enforced During Pendency of Case:  Illinois Supreme Court rules that an order entered for attorney fees before the divorce judgment is entered is interlocutory and not final, so trial court can modify the terms for payment of the fee award. Creditor could not initiate sheriff's sale of husband's home under pre-judgment order he recorded that limited collection to husband's bank accounts.

No Fee Award Where Parties Each Litigious:  Trial court did not err in refusing to award contribution toward attorney's fees where the parties “were equally unreasonable, litigious, and quarrelsome throughout the divorce proceedings, resulting in an unnecessarily expensive divorce.” The appellate court also stated, “Furthermore, although Jodi's earning potential pales in comparison to Earl's, she has failed to show an inability to pay her own attorney fees”. See McCoy, 272 Ill. App. 3d at 132 (ability to pay does not mean ability to pay without pain or sacrifice). Moreover, the appellate court commented that the wife was awarded a disproportionate and substantial share of the marital estate (worth approximately $326,000).

Substantially Prevailing on the Merits per 508(a)(3.1) Determined on Claim by Claim Basis: To recover fees under IMDMA §508(a)(3.1), which allows fees for claims on which appellant substantially prevailed, appellant need not obtain at least half of the relief sought in the entire appeal.

Lawyer Not Entitled to Recover Sanctions Award Made Against Lawyer by Another Party Urging that Client Sought Defense, etc.: (1) Lawyer, in a fee petition against the client, is not entitled to recover sanctions award made against the lawyer by another party to the suit, and the lawyer may not charge the client for defending against the Rule 137 sanctions petition. (2) Under §508(c)(2) of the IMDMA, a pending hearing on a fee petition brought by an attorney against the client does not affect the finality of the divorce judgment.

Interim Fee Statute Does Not Apply to Parentage Proceedings: IMDMA § 501(c-1), the interim attorney fee statute, does not apply to parentage proceedings. Court in parentage proceedings does not have authority to order disgorgement of retainer. The Supreme Court denied certiorari on this case.

Continuing Pattern of Physical and Verbal Abuse During Marriage Established Cause of Action for IIED as a Continuing Tort – S/L Running from Date Tortious Acts Cease: Illinois Supreme Court finds allegations of continuing and repeated physical and verbal abuse during the marriage stated a cause of action for intentional infliction of emotional distress (IIED). The cause of action for IIED is a continuing tort. The limitation period does not begin to run until the last injury or the date the tortious acts cease.

Estate Rights and ERISA's Preemption of Divorce Law: (1) ERISA preempts Illinois divorce law, so the second former wife named as life insurance beneficiary received death benefits even though the divorce judgment ending the first marriage required husband/father to name child from the first marriage as beneficiary. (2) General language in divorce agreement waiving interest in financial and property rights arising from marriage was not specific enough to be deemed waiver of second wife's beneficiary interest in ERISA-regulated group term life insurance given to husband as employee benefit. The ex-wife and the participant in their divorce had agreed to a “blanket revocation of their interests in all financial and property rights” arising out of their marital relationship and any asset assigned by the agreement including annuities, life insurance policies, and other financial instruments. However, the blanket revocation did not expressly name the participant's employer-provided life insurance. The trial court held that the former wife was entitled to the insurance proceeds and the daughter appealed to the Seventh Circuit. The Seventh Circuit affirmed citing the Supreme Court's Egelhoff decision regarding preemption. Egelhoff v. Egelhoff, 532 U.S. 141 (2001). 

The decision stated that because the plan “determines beneficiary status according to the person(s) named in the plan documents,” the former wife was the proper beneficiary. Turning to the waiver argument, the court reiterated its holding in an earlier case that “ERISA does not preempt an explicit waiver of interest by a nonparticipant beneficiary of [an ERISA-regulated] plan.” But, the former wife's waiver, because it did not expressly refer to the participant's employer-provided life insurance or mention employment-related benefits at all, was not “sufficiently explicit” to be a waiver of her interest in the proceeds at issue in the case.