2018 IL App (2d) 170627
Ill. App. Ct.2018Background
- Parties married in 1990; petitioner (James) sued for divorce in 2014. Trial occurred in 2016; judgment and memorandum of decision issued in early 2017.
- Respondent (Wynkoop) owned an auto-body corporation (ARC) formed before the marriage and operated initially from a 35th Street property he owned pre-marriage.
- In 1999 respondent acquired vacant land on Colosseum Drive, titled in his individual name; ARC later built and operated a new shop there. Financing involved construction and equipment loans from Northwest Bank in respondent’s and ARC’s names.
- Respondent testified he used approx. $270,000 of ARC savings to purchase the Colosseum land (and/or used bank financing); he produced no bank records, tax returns, or other documentary tracing of the purchase funds.
- Trial court classified ARC as respondent’s nonmarital business but classified the Colosseum real estate as marital property because respondent failed to overcome the marital-property presumption under 750 ILCS 5/503(b)(1) by clear and convincing evidence that the land was nonmarital under section 503(a).
- On appeal respondent argued the 2016 amendments (tax/estate planning language in §503(b)(1) and new §503(a)(6.5)) required a different result; the appellate court rejected the arguments and affirmed.
Issues
| Issue | Plaintiff's Argument (James) | Defendant's Argument (Wynkoop) | Held |
|---|---|---|---|
| Was Colosseum property marital or nonmarital? | Property acquired during marriage is presumed marital; Wynkoop failed to prove nonmarital source. | Land was purchased with nonmarital business funds and titled in his name for tax planning; §503(b)(1)’s tax/estate planning language and new §503(a)(6.5) apply. | Affirmed: property is marital. Wynkoop did not overcome the presumption by clear and convincing evidence that acquisition was under §503(a). |
| Does the 2016 "estate or tax planning" language in §503(b)(1) apply to this facts? | The amendment does not apply because respondent had to first establish the property was nonmarital under §503(a). | The tax-planning explanation for titling should convert the property to nonmarital without prior §503(a) showing. | Rejected Wynkoop’s reading; the tax/estate-planning clause modifies transfers of nonmarital property into co-ownership and does not bypass the §503(a) threshold. |
| Does §503(a)(6.5) (use of nonmarital property as collateral) make the land nonmarital? | The trial court need not reach §503(a)(6.5) because respondent forfeited the issue on appeal. | §503(a)(6.5) applies where a spouse uses nonmarital property as collateral to acquire property during marriage. | Forfeited on appeal for inadequate briefing; court did not address substance. |
| Was respondent’s testimony and supporting evidence sufficient to trace funds to nonmarital source? | N/A (petitioner bore no burden to disprove source). | Respondent’s testimony and proffered witness testimony corroborate that ARC funds paid for the land. | No: testimony was inconsistent and unsupported by documentary tracing; burden rested on respondent and he failed to meet the clear-and-convincing standard. |
Key Cases Cited
- In re Marriage of Werries, 247 Ill. App. 3d 639 (distinguishing marital vs. nonmarital estates presumption)
- In re Marriage of Henke, 313 Ill. App. 3d 159 (tracing and classification rules for nonmarital property)
- DeRossett v. DeRossett, 173 Ill. 2d 416 (section 503(a) is an exclusive list of nonmarital property)
- In re Marriage of Didier, 318 Ill. App. 3d 253 (legislature favors marital-property presumption; high evidentiary burden to overcome it)
- In re Marriage of Jelinek, 244 Ill. App. 3d 496 (defining and explaining fund tracing in marital-property context)
- In re Marriage of Schmitt, 391 Ill. App. 3d 1010 (burden of proof on party claiming nonmarital status)
- In re Marriage of Davis, 215 Ill. App. 3d 763 (tracing requires identification of source of funds)