IICLE Family Law Flash Points - March 2016

1.         Trial court’s $196,250 valuation of a family business that managed investment accounts with $75 million of assets under management reversed.  The Appellate Court reversed a trial court’s finding that husband’s investment management business which had $75 million in assets under management should be valued at $196,250 after each party submitted business valuations. Wife’s valuator opined that husband’s business was worth $495,000 using a market-based approach which took into account a prior transaction where husband purchased approximately $47 million in accounts from another investment advisor for $460,000 a year earlier.  Husband’s experts used a capitalization of earnings method and a multi-attribute utility model and opined that the value of the business was $196,250. The Appellate Court noted several problems with the trial court’s finding, including that the multi-attribute utility model’s objective is to conclude what portion of the total fair market value constitutes enterprise and personal goodwill, not the overall value of the business; that the court did not hear testimony from either expert but just reviewed their reports; and that it was against the manifest weight of the evidence that the court would conclude that the fair market value of a business would be less than what husband had paid for a portion of the business a year before trial.  In re the Marriage of Johnson, 2016 IL App (5th) 140479.

2.         $2,750 per month in rehabilitative maintenance for 30 months was an abuse of discretion when award should have been permanent maintenance.  A wife and mother who had worked as an assistant at husband’s business for 10-15 hours per week and devoted the rest of her time to caring for the parties’ two children, being an active member of the community and homemaker, and playing the role of “corporate wife” during a 28-year marriage received $2,750 per month in rehabilitative maintenance for 30 months. She had also developed COPD and was under a regular physician’s care at the time of trial. The Court noted at 50 years old with COPD, it was not an ideal time for her to be reentering the workforce.  Although the case was being remanded to the trial court for rehearing on a business valuation issue, which would necessitate the court re-evaluating the maintenance award, the Appellate Court opined that based on the facts in evidence, the factors enumerated in Section 504 of the IMDMA heavily favored a substantial permanent maintenance award.  In re the Marriage of Johnson, 2016 IL App (5th) 140479.

3.         Child custody evaluator appointed under [former] Section 604(b) of the IMDMA entitled to judicial immunity against malpractice lawsuits.  In 2012, Family Stress Clinic was retained to perform psychological testing on a father to a custody suit.  The psychologist diagnosed the father with obsessive-compulsive personality disorder and father filed a malpractice suit alleging that the diagnosis deviated from the standard of care in clinical psychology and as a result, he lost custody of his children.  The Appellate Court upheld the 7th Circuit’s prior ruling under Cooney v. Rossiter, 583 F.3d 967 (7th Cir.2009) that “[C]ourt-appointed experts…are absolutely immune from liability for damages when they act at the court’s direction.”  The Court, while stating that it need not decide whether psychological testing was within the scope of section 604(b), opined that it thought it was clear that the statute allowed courts to seek the advice of mental health professionals.  Heisterkamp v. Pacheco, 2016 IL App (2d) 150229.