In re Marriage of Altman
2016 IL App (1st) 143076
| Ill. App. Ct. | 2016Background
- Heather Altman filed for dissolution and protection orders; proceedings were highly contentious with extensive motion practice and discovery.
- Both parties claimed limited ability to pay attorneys; Altman alleged substantial fees owed to her counsel and had a nonmarital 403(b) worth ≈ $100,000; Block had liquidated a marital retirement account whose proceeds were held by Altman’s counsel.
- Altman sought interim attorney fees under 750 ILCS 5/501(c-1), requesting disgorgement of sums previously paid to Block’s counsel (Gerage) and allocation of escrowed marital funds to achieve parity.
- Trial court found both parties lacked access to sufficient assets or income, allocated most escrowed marital funds to achieve parity, and ordered Gerage to disgorge $16,000 for past services; Gerage did not comply and was held in contempt.
- On appeal the court considered (1) whether a spouse can be required to access a nonmarital retirement account to pay interim fees and (2) whether fees already earned and paid to counsel are “available funds” subject to disgorgement.
Issues
| Issue | Plaintiff's Argument (Altman) | Defendant's Argument (Gerage) | Held |
|---|---|---|---|
| Whether a spouse can be required to use a nonmarital retirement account to pay interim attorney fees | Altman: Her nonmarital 403(b) is an asset she could access to pay fees | Gerage: Nonmarital retirement is an available asset and should preclude finding lack of access | Court: Nonmarital retirement accounts exempt from creditor claims; absent evidence spouse accessed or can access funds without severe penalty, cannot be required to invade nonmarital retirement for interim fees (affirmed) |
| Whether funds already paid to counsel for past services are “available funds” subject to disgorgement under §501(c-1)(3) | Altman: Retainers and prior payments (where they exist) may be allocated to achieve parity; Earlywine supports disgorgement of retainers | Gerage: Once fees are earned and paid to counsel (deposited/used), they are no longer "available" and cannot be disgorged; disgorgement of earned fees is unfair and impractical | Court: Funds that have been earned and paid to counsel in the ordinary course are not “available funds” under §501(c-1)(3); disgorgement of earned fees reversed and contempt vacated (reversed) |
| Whether trial court should have required disgorgement from prior counsel as well | Altman: If funds are available they exist somewhere and could be recovered from any counsel who received them | Gerage: Extending disgorgement to former counsel would produce absurd results (requiring ex-clients’ former counsel to pay months/years later) | Court: Declined to extend disgorgement to earned fees held/paid out by prior counsel; practical and equitable concerns support limitation (reversed as to contempt) |
| Whether the court erred by failing to allocate the entire escrowed retainer ($1,716) | Altman: Trial court should allocate all escrowed marital funds to achieve parity | Gerage: (implicit) clerical or timing issue; not necessarily prejudicial now | Court: Trial court should allocate the remaining $1,716 on remand if not moot (remanded) |
Key Cases Cited
- First Capitol Mortgage Corp. v. Talandis Construction Corp., 63 Ill.2d 128 (1976) (appellate courts may decide merits without appellee’s brief when record is simple)
- In re Marriage of Earlywine, 2013 IL 114779 (2013) (advance-payment retainers in divorce context subject to statutory interim-fee rules)
- Dowling v. Chicago Options Associates, Inc., 226 Ill.2d 277 (2007) (treatment of advance payment retainers under ethics/rule frameworks)
- Jakubik v. Jakubik, 208 Ill. App. 3d 119 (1991) (retirement plans/exempt property not reachable for attorney fee judgments)
- In re Marriage of DeLarco, 313 Ill. App. 3d 107 (2000) (interim fee awards may be treated as advances on marital estate and trued up at final disposition)
- Superior Structures Co. v. City of Sesser, 292 Ill. App. 3d 848 (1997) (statutory construction limits court to statutory language)
- Bowman v. Ottney, 2015 IL 119000 (2015) (avoidance of statutory constructions that produce absurd results)
- Kaufman, Litwin & Feinstein v. Edgar, 301 Ill. App. 3d 826 (1998) (discussing §501(c-1) interim awards to achieve parity)