Family Law Flash Points - March 2020

1. Second District upholds the survival of interim fees awarded but not paid prior to the entry of a voluntary dismissal order.  Husband and wife brought a joint motion to voluntarily dismiss their respective petition and counter-petition on file.  At the hearing on the motion for voluntary dismissal, the court granted the motion but entered judgment against the husband in favor of wife’s former counsel in the amount of $7,500 which was derived from an earlier interim fee award entered against husband which had not been paid. Husband appealed and the Second District upheld.  Relying on the abuse of discretion standard, the Court noted that the trial court’s rationale was reasonable in that husband “should not be allowed to escape liability for a previously established obligation through such a procedural maneuver.” Further, the interim award was converted to a judgment prior to the dismissal of the case, negating the argument that the interim fee order was a temporary order which expired.  Since the divorce case was ultimately dismissed, wife’s former counsel would now have to rely on other collections avenues to enforce the judgment and to seek an additional judgment for the balance of any unpaid fees. In re Marriage of Keller, 2020 IL App (2nd) 180960.

2. Trial court’s imputation of investment income to wife for purposes of setting child support and maintenance upheld. In calculating child support and maintenance, the trial court found that wife was awarded $1,136,535 in investments and $471,500 in cash and applied a 6.5% rate of return to $950,000 of those assets which took into account the amount wife had to pay off certain debts.  At trial, the evidence showed the parties’ investment portfolio had a historical rate of return of 9.93%.  The trial court was well within its discretion to include the interest income which was two-thirds the historical rate of return when calculating maintenance and child support.  The trial court also declined to impute interest income to husband attributable to the $600,000 plus held in his business as retained earnings, which was also affirmed.  There was no evidence that husband had manipulated his income to minimize his support obligations as his testimony indicated that his company needed to keep large cash reserves on hand to acquire bonds for large commercial projects. In re Marriage of Lugge, 2020 Il App (5th) 190046.

3. Trial court’s interim fee award did not require a specific finding that husband had the ability to pay.  In a highly contentious and heavily litigated case, the trial court ordered that a fund would be created with a total amount of $750,000 for litigation costs with $200,000 coming from a home equity line of credit and $550,000 to be funded by husband.  Husband failed to pay the $550,000 and the trial court entered a commitment order with a purge amount of $550,000.  Husband filed a notice of appeal and for a stay which was granted and then posted a $550,000 bond.  The Appellate Court stated the plain language of Section 501(c-1)(3) does not require the court to expressly set forth specific findings in an order regarding husband’s ability to pay and therefore rejected the argument that the order was reversible as a matter of law.  Further, the Court noted the trial judge was in a better position that it was to assess the nature of the alleged discovery delays as well as husband’s claims about his current financials.  Although husband argued the majority of his assets were pledged and not accessible, his only evidence presented at the hearing was testimony from his own expert which opined regarding the possible ramifications to husband’s financial circumstances if the market suffered a drastic decline.  By contrast, wife’s expert pointed to his significant borrowing power and his overall personal net worth in excess of $20 million.  The Court also noted that husband’s claim that he had the inability to pay was contradicted by the fact that he posted the $550,000 bond after his incarceration. The award was not an abuse of discretion. In re Marriage of Paris, 2020 IL App (1st) 18116.