Jan 30, 2023

IICLE Family Law Flash Points - January 2023

Trial Court’s Order Escrowing Real Estate Sales Proceeds Postjudgment Upheld

In In re Marriage of Patel, 2022 IL App (1st) 211650, the husband appealed the trial court’s order escrowing the proceeds from the sale of a piece of real estate he had been allocated as his sole and separate property under the judgment for dissolution of marriage. He had filed a motion to reduce and/or abate child support, maintenance, and contribution to children’s expenses due to an alleged termination of his employment. The wife subsequently filed a motion to establish a child support trust, a petition for rule to show cause for failure to make support payments, and an emergency motion to escrow sales proceeds from the real estate. The trial court found the matter to be an emergency and ordered the proceeds from the sale of the real estate escrowed. The husband argued the trial court’s order was an impermissible prejudgment attachment because the wife had no legally cognizable interest in the property based on her unadjudicated claims. The appellate court disagreed and held that the trial court did not issue a prejudgment attachment but instead an injunction and was exercising its equitable power to protect two minor children and their right to support. A trial court may order an injunction of proceeds to prevent the dissipation of assets that may be used to satisfy court-ordered child support and maintenance. The court also found that the wife had met all of the requirements of an injunction under Illinois law.

Ex-Husband’s Disability Pension Payments Eventually Convert to Age-Based Retirement Payments Under Pension Code, Portion of Which Ex-Wife Was Entitled to Under Judgment

Nearly 20 years after entry of a judgment for dissolution of marriage, the wife in In re Marriage of Grandt, 2022 IL App (2d) 210648, petitioned for enforcement of the judgment and for restitution and sought to treat the husband’s disability pension as a retirement pension subject to division per the parties’ marital settlement agreement (MSA). After the entry of judgment, the husband was injured during his employment as a firefighter and began receiving disability benefits. The issue was whether, under the Illinois Pension Code’s statutory unified employee disability and pension plan, the husband’s disability benefits converted to retirement payments upon retirement age, of which the wife was entitled to 50 percent of the marital portion. The trial court denied the wife’s request and held that under In re Marriage of Belk, 239 Ill.App.3d 806, 605 N.E.2d 86, 178 Ill.Dec. 647 (2d Dist. 1992), and pursuant to the MSA and the Pension Code, the parties intended to divide only the husband’s retirement payments, not disability payments, and therefore the wife was not entitled to any portion of his disability. The appellate court reversed. In doing so, it declined to follow Belk and instead relied on In re Marriage of Benson, 2015 IL App (4th) 140682, 33 N.E.3d 268, 392 Ill.Dec. 719, which stands for the proposition that a disability pension that is actually a substitute for a retirement pension will be treated as a retirement pension. The court also relied on the Pension Code, which provides that the husband began to receive a three-percent annual increase to his disability pension at the same time he would have been eligible to receive an annual increase to his retirement pension. Therefore, the Pension Code structurally provides a point at which the income replacement function of the disability pension transitions to a retirement pension as the recipient continues to age.

Order for Supervised Visitation Affirmed

In In re Marriage of Palarz2022 IL App (1st) 210618, the father appealed the trial court’s order finding that he had engaged in conduct that seriously endangered the minor child and that it was in the child’s best interests that he have supervised visitation. The appellate court affirmed. The evidence propounded at a two-day evidentiary hearing included evidence that the father had mental illness, refused treatment, abused alcohol, had multiple orders of protection entered against him, and was verbally abusive to the mother in front of the minor child. The guardian ad litem (GAL) testified that the father admitted to her that he had been diagnosed with unspecified bipolar disorder and had taken medication in the past but had stopped. The GAL also testified that the prior supervisor refused to continue due to threatening behavior by the father in the past and that the father had received a citation for driving under the influence. The GAL ultimately recommended that she needed more information regarding whether the father was routinely taking his medication before she could recommend anything other than supervised visitation. The trial court, in ordering continued supervised visitation, found that the father’s testimony was not credible and was inconsistent regarding his alcohol use and noted his mental health struggles. The trial court’s endangerment finding was not against the manifest weight of the evidence.

Broad Waiver Language in MSA Did Not Waive Ex-Wife’s Own Rights To Receive Proceeds from Ex-Husband’s Federal Civil Rights Judgment

At issue in In re Marriage of Kelly2022 IL App (1st) 220241, was whether broad waiver language in a 1994 MSA in which both parties waived all rights of the other’s property and assets included a waiver of the wife’s rights to receive proceeds from the husband’s federal civil rights judgment, which was entered during the marriage in 1987. The civil rights judgment provided that the husband would receive annual disbursements from the Oak Park Police Department after his 50th birthday and that, upon his death, the same payments would continue to be made to his “present wife” during her lifetime. 2022 IL App (1st) 220241 at ¶3. The husband received 16 annual payments until his death in 2017. He had also remarried after he and his first wife divorced in 1994. The U.S. district court declared the first wife as the defined “present wife” pursuant to the terms of the federal judgment and deferred to the state trial court to determine whether language in the MSA provided that the first wife waived her right to receive proceeds from the federal judgment after the husband’s death. The trial court ruled that she had waived the right, and the appellate court reversed. The court considered two factors: (1) whether the disputed asset was specifically listed in the MSA; and (2) whether the waiver language specifically stated that the parties were waiving any expectancy or beneficial interest. The MSA addressed the husband’s right to receive disbursements under the judgment but was silent about the first wife’s right to receive disbursements after his death. The appellate court viewed these as two different assets, not one combined asset, whereas the trial court viewed them as one asset. Because the MSA listed the husband’s right to payments as a marital asset and awarded that asset to the husband but did not address the first wife’s right to payments as a marital asset and did not award her rights to payments to the husband, the MSA did not comply with the first factor. With respect to the second factor, the husband relied on the broad “mutual release” language in the MSA. However, the court held that while his first wife broadly relinquished all rights to the husband’s property, she was not relinquishing any of her rights to her own property, including her right to receive payments under the judgment after his death. Therefore, the first wife’s rights to receive annual payments under the federal civil rights judgment survived.

News and Insights

Looking for a firm that knows Family Law, inside and out? We're ready to listen.