In re Marriage of Burrell
ORDER
¶ 1 Held: Trial court‘s classification and allocation of property in dissolution proceeding resulted in an equitable distribution.
¶ 2 Petitioner Emma Burrell filed a petition for dissolution of her 38-year marriage to respondent Louis Burrell. Following numerous hearings and a trial, the trial court distributed the parties’ assets based on its classification of various rental properties as marital property and taking into account Louis‘s dissipation of marital assets. Louis appealed the distribution. We affirm.
¶ 3 Petitioner Emma Burrell and respondent Louis Burrell were married in 1973. The couple had two children, both of whom are now adults. Louis holds two master‘s degrees and is retired after 39 years with the Chicago Public Schools, earning a pension of approximately $5,000 per month. Emma has a high school diploma and worked as a bursting clerk for a steel company prior to the marriage. At the time the couple married, Louis owned and operated a real estate business that he had started in 1968, and owned seven rental properties in Kankakee. Three of the properties were subsequently sold and the four remaining properties included 1017 North Schuyler, 964 North Indiana, 620 North Harrison, and 515-25 East Birch. The North Schuyler property was used in the 1970‘s, 1980‘s, and in 2005 to secure mortgages, which were used to rehabilitate and pay property taxes on other properties the couple jointly owned. A release of a 1983 mortgage on the property to a Trust No. 2205 indicated the mortgage was in both Louis and Emma‘s names. The parties lived at 964 North Indiana during the first year of their marriage. At least one unit at 964 North Indiana was part of a subsidized housing program in which the parties participated. The North Harrison property also participated in a rent subsidy program. It was used as the business office and included a model rental unit. There is some evidence the North Harrison property was purchased by Emma with martial funds at a tax sale in 1997. The East Birch property was part of a housing voucher program with Kankakee County. The leases and eviction notices used there named both Emma and Louis as landlords.
¶ 5 The parties acquired other property during the marriage, including vacant lots and the Austin Apartments, which were built in 1978. Louis took the year off from his teaching position to build the apartments, which he claimed were financed entirely with his nonmarital rental proceeds and
¶ 6 Also in October 2007, Emma sought and was granted an order of protection against Louis, who was required to move out of the marital home and to avoid contact with Emma. In November 2007, Emma filed a petition for dissolution of the marriage. In December 2007, the trial court issued a temporary restraining order (TRO) permitting Louis exclusive management of the rental properties, subject to monthly accountings to the trial court, and prohibiting Louis from spending business
¶ 7 In August 2009, Louis moved for the return of the furnishings Emma took from the business office at 620 North Harrison, and a hearing took place. Louis testified that he maintained checking accounts at Fifth Third Bank and Standard Bank. The Fifth Third account was used for the deposit of his pension check and the subsidized housing checks from the KCHA. The Standard account was used for the HAP deposits. Non-subsidized rent checks were deposited into both accounts. He used the ATM at Harrah‘s as a source of cash to pay his maintenance staff, purchase materials for the rentals, and provide loans for his friends. The trial court stated that Louis could live at 620 North Harrison but that it would not decide the personal property issues piecemeal. The trial court
¶ 8 In January 2010, Louis filed a counterclaim for dissolution of marriage and a petition for citation to recover dissipated marital assets. In his petition to recover, Louis claimed that Emma dissipated insurance checks, bank rent checks, and mortgage funds for the marital property. Louis filed a
¶ 9 A trial began in November 2010. Emma testified that she was active in the business
¶ 10 Louis testified that he currently lived with a roommate in Chicago, paying $500 to $1,000 per month, and also paid $2,486 per month for Debra Ford‘s mortgage in exchange for the use of her home office. He did not live with Ford. Louis D. Burrell Builders was owned by a land trust, Trust No. 2205, which he created in 1967 and to which he was the sole beneficiary. He was unaware whether the trust was still in existence. He also entered into a prenuptial agreement with Emma but he could not provide records of either the agreement or the trust because the records were in Emma‘s possession. The trust owned the Austin Apartments, as well as the real estate at 1017 North Schuyler, 964 North Indiana, and the marital home at 2330 West Grace. He built the apartment building at 1017 North Schuyler in 1968. The 2005 mortgage on the property was used to pay property taxes on various properties and was in his name alone. He bought the property at 964 North Indiana in 1968 and it was titled in his name alone. The property was never mortgaged during the marriage. The property at 620 North Harrison was initially mortgaged in Louis‘s name alone. Both 1017 North Schuyler and 620 North Harrison were included in the parties’ joint bankruptcy
¶ 11 Louis also called as a witness a tenant at the Austin Apartments who testified that Emma improperly charged her rent and kept utility reimbursements meant for the tenant. The project manager who replaced Emma at the Austin Apartments testified to several alleged thefts of company funds committed by Emma, to improper collection of rents and withholding of utility reimbursements, and to missing paperwork for the HAP apartments. She did not have personal knowledge of the contents of the records prior to her employment in June 2008.
¶ 12 Bank records submitted at trial indicated that Louis withdrew $153,201 from the ATM at Harrah‘s casino, paid $50,935 for Ford‘s mortgage, and made other unexplained withdrawals using official checks in the amount of $52,391. During the trial, in March 2011, the trial court determined that Emma had not turned over all the business records as directed in its June 2008 order, and ordered that Louis, with police escort, be allowed to visit the marital home, including the garage, to collect the remaining business records. After the pickup took place, Louis offered the testimony of his employee who collected and sorted through the additional records provided by Emma and described that the records consisted of old newspapers, books and receipts.
¶ 13 Following the trial, the trial court found that the four rental properties owned by Louis prior to the marriage were transmuted into marital property by the commingling of the income from the properties with the parties’ other rental properties; both parties contributed to the acquisition and preservation of the marital estate; neither party had significant nonmarital property; no antenuptial agreement existed; and both parties had capital assets sufficient to generate income. The trial court found Louis had dissipated the marital estate in the amount of $256,547; Louis was not a credible
ANALYSIS
¶ 15 On appeal, the issue is whether the trial court erred in its property distribution. Louis sets forth a number of ways he maintains the trial court erred in allocating the parties’ property. He contends that Emma‘s share is disproportionate and that her negative conduct should serve to lessen the contribution, if any, she made to the marital estate. Louis further argues that the trial court erred in finding that his nonmarital properties were transmuted into marital property, he dissipated marital assets, and he was not a credible witness.
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¶ 18 Louis asserts that the trial court awarded Emma $866,408 in marital property, including $666,408 in marital assets and $200,000 in marital personal property, and that he was only awarded marital assets valued at $375,782. Contrary to Louis‘s assertion, the trial court reached a near equal distribution, awarding $666,408 in assets to Emma and $632,329 in assets to Louis. The trial court subtracted from Louis‘s award the $256,547 it found he dissipated, for a final award to Louis of $375,782. The trial court distributed the parties’ property in just proportions after considering the applicable factors in
¶ 19 Initially, we reject Louis‘s suggestion that Emma‘s share of the property distribution should be lessened because of marital “misconduct.” The statutory factors guide the distribution of marital conduct and misconduct is not a consideration. Similarly, we reject Louis‘s argument that Emma disproportionately received $200,000 in marital furnishings. The trial court expressly noted that it took as an admission of the parties that the personal property in each party‘s possession was equal. He offered no evidence of the value of personal property in his possession or Emma‘s. The trial court‘s distribution was supported by application of the factors under
¶ 20 Louis maintains the trial court erred in determining that the four rental properties he owned prior to the marriage were transmuted into marital property. He argues that the properties were titled in his name only and never lost their identity as nonmarital after the marriage. He further maintains that the vacant lots which were assigned to him in the distribution do not constitute marital property. Louis asserts that because any marital property obtained with nonmarital property remains nonmarital, the deposit of rental income from his nonmarital properties into the parties joint account does not transmute the properties’ ownership into marital. He argues that the trial court erred in
¶ 21 Before a trial court distributes property in a dissolution, it must classify it as marital or nonmarital. In re Marriage of Gattone, 317 Ill. App. 3d 346, 351 (2000). There is a rebuttable presumption that all property acquired during the marriage is marital, including nonmarital property transferred into some form of co-ownership. Gattone, 317 Ill. App. 3d at 352. When marital and nonmarital funds are commingled and lose their identities in acquiring a newly created asset during the marriage, the asset is considered a marital asset. In re Marriage of Eddy, 210 Ill. App. 3d 450, 457 (1991). In such circumstances, the commingled property is transmuted to marital property. In re Marriage of Mouschovias, 359 Ill. App. 3d 348, 355 (2005). When property is acquired during the marriage in exchange for nonmarital property, a party must prove by clear and convincing evidence that the new property was acquired in exchange for nonmarital property. Eddy, 210 Ill. App. 3d at 456. We will not disturb a trial court‘s classification unless it is against the manifest weight of the evidence. Gattone, 317 Ill. App. 3d at 351.
¶ 22 The trial court found that the four properties owned by Louis prior to the marriage, including 1017 North Schuyler, 964 North Indiana, 620 North Harrison and 515-25 East Birch, were treated like the marital properties and were transmuted into marital property. All the rental income, including the subsidy checks, from the nonmarital properties was deposited into the parties’ joint checking account. Emma and Louis used that account to pay expenses for all the rental properties and for their personal expenses. Marital funds were used for the purchase, upkeep, maintenance and taxes on marital and nonmarital properties, including the properties participating in subsidized housing programs. The contracts for the subsidized programs were executed with both Emma and Louis. The property at 1017 North Schuyler was mortgaged during the marriage in both Emma and
¶ 23 Louis also challenges the trial court‘s classification of the Austin Apartments as marital property, arguing that title was solely in his name and that the property was acquired in exchange for his nonmarital assets. Aside from his unsubstantiated testimony, Louis failed to provide clear and convincing evidence that the Austin Apartments were funded with nonmarital assets. The HAP contracted was executed in 1979 by both Emma and Louis and renewed in 2011. The monthly HAP subsidy check was deposited into the parties’ joint personal and business account until Louis transferred it to his individual account after Emma filed her petition for dissolution of the marriage. Even if he could produce the evidence, it would not negate that the Austin Apartment income was commingled with the income from the couple‘s other rental properties and covered by a HAP
¶ 24 Next, Louis challenges the trial court‘s dissipation findings. He asserts that the trial court improperly allowed Emma to file untimely answers to his request to admit, in which he asserted that Emma converted to her own use proceeds from four insurance checks that were marital property. He also argues that the trial court‘s conclusion that he dissipated marital assets, maintaining that Emma failed to give him adequate notice of the dissipation claim and did not submit sufficient evidence to support the claim.
¶ 25 A party has 28 days to serve its response to a request to admit on the party seeking the admission.
¶ 27 A party claiming dissipation must give notice 60 days before trial or 30 days after the close of discovery, whichever is later; the notice must include a date or period when the marriage began breaking down, identify the property dissipated; provide a date the dissipation took place; be filed and served; and is limited to 5 years before the petition for dissolution was filed or three years after the party claiming dissipation knew about the dissipation.
¶ 28 The trial court determined that Louis dissipated $256,547: $153,001 of ATM withdrawals at the casino; $50,955 in mortgage payments for his friend; and $52,391 in unexplained official checks. Emma presented evidence that Louis spent these funds from marital assets and that these funds were spent at a time when the marriage was breaking down. Louis offered a variety of explanations for the expenditures, including that he paid Ford‘s mortgage as repayment for a loan, as rent for using her home office, and as his share of living expenses. He explained that he used the casino ATMs to withdraw cash to pay his employees, to buy materials, and to provide loans to his friends. He offered no evidence at trial regarding the unaccounted for official checks, except unsupported assertions that he used them to pay his employees and for other business expenses. Louis did not present any evidence in support of his claims and the trial court rejected his explanations for the expenditures. It accepted Emma‘s evidence, which established dissipation. We find that the trial court‘s finding was not an abuse of discretion.
¶ 29 The trial court also found Louis was not a credible witness, a finding Louis challenges. Louis points to what he calls examples of Emma‘s lack of credibility and argues that the trial court‘s credibility finding is not supported by the evidence. The assessment of witness credibility is the
¶ 30 For the foregoing reasons, the judgment of the circuit court of Kankakee County is affirmed.
¶ 31 Affirmed.