Lead Opinion
delivered the opinion of the court:
After trial on his wife’s petition for dissolution of marriage, respondent Martin W. Didier (Martin) appeals the judgment of the circuit court of Cook County. Martin asserts that the trial court erred in (1) classifying certain property as nonmarital and awarding that property to petitioner Gail A. Didier (Gail), and (2) awarding Martin inadequate maintenance. Gail cross-appeals, claiming that the trial court erred in (1) awarding Martin any maintenance “whatsoever,” (2) finding that certain funds that Gail transferred into Martin’s business were a gift rather than a loan, and (3) relieving Martin of all child support obligations. We affirm in part, reverse in part and remand.
Martin Didier ánd Gail Adreani were married on February 14, 1976, in Chicago, Illinois. The couple had three children: Ryan, born May 3, 1980; Kelly, born May 22, 1982, and Kari, born April 26, 1985. At the time of their marriage, both Martin and Gail worked outside the home. Gail stopped working when their first child was born in 1980. Both before and during the marriage, Gail acquired substantial corporate and partnership interests that provided investment income ranging from $600,000 to $850,000 per year. Gail’s income was used to support the family, including Martin. Martin was employed by a succession of different corporations between 1976 and 1990. Martin’s highest W-2 income for any given year during this period was approximately $35,000. As of 1990, Martin became self-employed.
The parties were in agreement as to several issues related to the dissolution and stipulated to the following facts before the trial court:
A. Gail is a mother and homemaker and works part-time for McDonald’s. Gail resides at 4161 Terri-Lyn Lane, Northbrook, Illinois, with the parties’ three children.
B. Martin is self-employed through Integration Technologies, Inc. (ITI), a subchapter “S” corporation incorporated by Martin in 1990.
C. Martin received as a gift from Gail’s family 3.743%, or 5,600 shares, of capital stock in North Pier Terminal, Ltd., a closely held corporation. This stock is Martin’s nonmarital property and should be assigned to him.
D. Gail received as a gift from her family 3.743%, or 5,600 shares, of capital stock in North Pier Terminal, Ltd. This stock is Gail’s nonmarital property and should be assigned to her.
E. In addition to her North Pier Terminal, Ltd., stock, Gail owns the following corporate and partnership interests:
Name % Interest # of Shares Date(s) Acquired
National Terminals Corp. 19.091353 38,484.4 08-21-89 —
04-02-97
Norridge Development Corp. 10 100 12-08-92
Courts of Amber Woods, Inc. 10 100 08-21-89
Norwood Builders, Inc. 20 20 03-01-89
Norwood Plaza, Inc. 20 500 08-25-89
Adreani Farms (partnership) 20 n/a 1974
Adreani Buildings (partnership) 20 n/a 1983.
E The parties acquired the following vehicles during the marriage:
1. 1998 Ford Explorer
2. 1991 Ford Explorer
3. 1990 Ford Taurus
4. 1999 Toyota 4Runner
5. 1998 Saab 900.
Gail is the titleholder for all of the aforementioned vehicles. The parties have entered into an agreed order whereby Gail has assigned title of the 1990 Ford Taurus to Martin, provided that Martin takes all steps necessary to transfer title of said vehicle into his name with the Illinois Secretary of State, and Martin agrees to indemnify and hold Gail harmless with respect to the ownership and use of said vehicle.
G. Title to the residence located at 4161 Terri-Lyn Lane, North-brook, Illinois (the Northbrook home), is held in a land trust under trust agreement No. 8096 with Parkway Bank & Trust Company. Gail is the owner of 100% of the beneficial interest under said trust agreement. Martin stipulates that if the residence is found to be Gail’s nonmarital asset, he will not make any claims that he made marital contributions for which the marital estate is entitled to reimbursement. The stipulated value of the property is $430,000. There has never been a mortgage on the property.
H. In addition, Gail has the following assets
1. an ABN-AMRO brokerage account in the name of Gail A. Didier;
2. La Salle Bank checking and savings accounts in the name of Gail A. Didier;
3. a $5,000 life insurance policy; and
4. all furniture, furnishings, fixtures, appliances, jewelry, clothing and other personal property in the Northbrook home or in her possession.
I. Martin owns 100% of the stock of ITI. ITI shows on its balance sheet, contained within the corporation’s 1997 federal income tax return, a “Loan from Shareholders” in the amount $205,639.
J. In addition, Martin has the following assets:
1. La Salle Bank checking and savings accounts in the name of Martin W Didier;
2. a Charles Schwab IRA in the name of Martin W Didier;
3. a MONY $25,000.00 death benefit life insurance policy; and
4. all furniture, furnishings, fixtures, appliances, jewelry, clothing and other personal property in his possession.
K. Martin has stipulated that neither he nor his attorney is seeking an award of attorneys fees from Gail.
The record before us on appeal is lengthy and fact-intensive. In the interests of brevity, we forego an initial recitation of the facts. Relevant facts will be discussed as we address each of the issues on direct and cross-appeal.
I. Classification of Marital Assets
Martin appeals the trial court’s classification of the Northbrook home, Gail’s corporate and partnership interests and certain accounts purportedly containing investment income received from those interests as Gail’s nonmarital assets. We first consider the classification of the Northbrook home.
The record reflects that, after their marriage in 1976, the parties lived in a condominium complex known as “Washington Golf’ in Niles, Illinois. Gail testified that one of the condominium units in the complex was a gift to her from her father, Raymond Adreani (Adreani). Adreani was the developer responsible for building the complex. Gail further testified that title to the condominium was held in her name only and that Martin’s name had never been on the title. Martin offered no testimony to the contrary. In 1983, the parties began construction of the Northbrook home on a lot owned by Adreani in another of his real estate developments. In 1984, construction of the Northbrook home was completed and the family moved in. There was conflicting testimony as to the degree of Martin’s involvement in the construction process. Although the trial court made no specific findings of fact on this point, Gail testified that she sold her condominium and used the proceeds of the sale to finance the construction of the Northbrook home. Gail further testified that in 1986 she paid Adreani $29,870 for the lot upon which the house was built. In 1986, Adreani executed a quitclaim deed transferring title to the Northbrook home to the Parkway Bank and Trust Company as trustee for Gail and named Gail as the 100% owner of the beneficial interest in a land trust. Gail testified that Martin’s name had never been on the title to the Northbrook home. The Northbrook home never had a mortgage. Although Martin testified that he turned his paychecks over to Gail, Gail testified that all of the household expenses were paid from her nonmarital income. The trial court found that “Gail acquired the property at 4161 Terri-Lyn Lane, Northbrook by gift from her father” and assigned that property to Gail as her nonmarital asset.
“Before a court may dispose of property upon dissolution of marriage, the property must be classified as either marital or non-marital. [Citation.] The trial court’s classification will not be disturbed on appeal unless it is contrary to the manifest weight of the evidence.” In re Marriage of Gurda,
“There is another presumption that a transfer from a parent to a child is presumed to be a gift, and that presumption may be overcome by clear and convincing evidence to the contrary.” In re Marriage of Hagshenas,
Therefore, without the benefit of the presumption of gift, pursuant to statute it was Gail’s burden at trial to establish by the manifest weight of the evidence that she acquired the “property at 4161 Terri-Lyn Lane” as a gift from her father. 750 ILCS 5/503(a)(2) (West 1998).
The case at bar presents us with an unusual situation: two individuals (Gail and Adreani) attempted two separate conveyances of a residential home and the lot upon which it was constructed. From our reading of the record, the apparent understanding of the trial court and the parties was that Adreani allowed Gail and Martin to construct a house on Adreani’s land in Northbrook. Two years after the house was completed, during which time Gail and her family lived in the house, Gail paid to Adreani the sum of $29,870 (ostensibly, at least in part, from the proceeds of the sale of her nonmarital condominium) for the lot only. The trial court concluded that Adreani had gifted the house to Gail by deeding the land upon which it rests to the Parkway Bank and Trust Company as trustee of a land trust and naming Gail as 100% owner of the beneficial interest. The trial court ruled predicated on that conclusion, and the parties’ briefs in this appeal were consistent with this scenario.
Upon analysis, however, the matter is not so neatly resolved. The general rule derived from real property law is that “buildings and other structures placed on or affixed to the soil become part of the land and belong to its owner.” 41 Am. Jur. 2d Improvements § 3 (1995); 21 Ill. L. & Prac. Improvements § 3 (1977). Had this rule been operating, Adreani would have acquired title to the Northbrook home upon its completion as owner of the lot upon which it rests.
However, “[a]n exception to the general rule that improvements belong to the owner of the land is found in the well-established principle that a structure erected by one man on the land of another, with his permission, does not become a part of the real estate, but continues to be the personal property of the person who erected it.” (Emphasis added.) 41 Am. Jur. 2d Improvements § 4 (1995). It is certain that Gail had her father’s permission to construct the North-brook home on his lot. “If the improvement is made by the owner’s permission, an agreement that it shall remain the property of the person making it is implied, in the absence of any other facts or circumstances showing a different intention ***.” 42 C.J.S. Improvements § 3 (1991).
In order to determine whether any facts or circumstances in the record reflect that Gail and her father intended that he own the Northbrook home upon its completion, the relevant period for our consideration is that period encompassing the construction of the home. The record reflects that Gail built the home for her family, including Martin, and intended that they use it as their primary residence. Gail’s father was certainly aware of and approved this use of his land. In fact, he allowed Gail and her family to live in the house for two years without making any claim of possession or ownership prior to deeding the land into trust on Gail’s behalf. In light of the principles of real property law set forth above, and after a careful review of the record, we have been unable to find any factual basis to defeat an implied agreement between Gail and her father that she would retain ownership of the Northbrook home upon its completion. Considering the conflicting evidence with respect to Martin’s involvement in the construction process and with due deference to the role of the trial court in assessing the credibility of the witnesses before it, we find under these narrow circumstances that, based on an implied agreement between Gail and her father, Gail acquired sole title to the Northbrook home upon its completion.
Our decision finds support in the actions of Gail’s father himself. In 1986, two years after the Northbrook home was built, he sold the lot to Gail for $29,870. A signed closing statement, state and county real estate transfer declarations and Gail’s own testimony support the conclusion that her father’s purpose in this transaction was to sell her the lot only. Adreani then transferred the lot into trust via quitclaim deed.
The trial court found that Gail received the Northbrook “property,” which we interpret as the Northbrook home and the lot, as a gift from her father. However, “it is elementary property law that a quitclaim deed will convey whatever title or interest the grantor may have in the land at the time it is given and only such title and interest.” (Emphasis added.) Cree Development Corp. v. Mid-America Advertising Co.,
One of the elements of a gift is that the transfer must be gratuitous. Agazim,
We have held that, “[i]n an Illinois land trust, legal and equitable title to real property is held by the trustee and the interest of the beneficiary is personal property.” In re Estate of Mendelson,
We therefore hold that, under these circumstances, the trial court’s classification of the “property at 4131 Terri-Lyn Lane” in Northbrook as Gail’s nonmarital property was against the manifest weight of the evidence.
We next address the trial court’s classification of Gail’s corporate interests as her nonmarital property. Martin stipulated that Gail’s North Pier Terminal, Ltd., stock was her nonmarital property. Martin also does not contest the classification of Gail’s 20% interest in the Adreani Farms partnership as nonmarital as Gail acquired this interest two years prior to the parties’ marriage. Even though Gail acquired her 20% interest in the Adreani Buildings partnership during the marriage, Martin concedes that this interest is Gail’s nonmarital property based on a gift letter from her father. Martin argues however that Gail failed to prove that she acquired her remaining business interests in Norridge Development Corp., Courts of Amber Woods, Inc., Nor-wood Builders, Inc., and Norwood Plaza, Inc., as nonmarital gifts from her father.
In support of this assertion, Martin points to the finding of the trial court that Gail’s father, Raymond Adreani, engaged in a “pattern of endowment” of portions of his business interests to his children. Applying the rule of conflicting presumptions discussed above, Martin correctly states that it was Gail’s burden at trial to prove by the manifest weight of the evidence that the elements of a gift with respect to these interests were met. Hagshenas,
At trial, Gail testified that the contested business interests were gifts from her father. Martin offered no testimony to the contrary. Susan Smith and Bruce Adreani, Gail’s sister and brother, both testified that Gail’s business interests were gifts from their father and that all five of the Adreani children had each received identical gifts. Also before the trial court was the parties’ stipulation that the individual transfers of the North Pier Terminal, Ltd., stock to Gail and Martin, respectively, were “gift[s] from Gail’s family.” As shown by the stock certificates in the record, all of the other stock transfers were to Gail alone. Although we agree with the statement that the “evidence most relevant in determining donative intent is the donor’s own testimony” (emphasis added) (In re Marriage of Simmons,
Finally, Martin challenges the trial court’s classification of the following investment accounts as Gail’s nonmarital property:
Name
ABN-AMRO Account
La Salle Nat’l Bank Money Market Account
La Salle Nat’l Bank Money Market Account
La Salle Nat’l Bank Checking Account
TOTAL:
Amount
$211,588.00
$249,246.00
$ 5,366.00
$ 25,546.00
$491,746.00.
The trial court found that these accounts were established with income from Gail’s nonmarital businesses and awarded them to Gail. Martin challenges this finding, claiming that Gail failed to trace the funds in these accounts by clear and convincing evidence from time of receipt through trial, and thereby failed to overcome the presumption of marital property. Based on Gail’s failure to overcome the presumption of marital property, Martin argues that these accounts should therefore have been classified marital property by default under section 503(b) of the Dissolution Act. 750 ILCS 5/503(b) (West 1998). Gail did not respond to this argument in her briefs. As authority for his position, Martin cites the previous decision of this court in In re Marriage of Jelinek,
As with the properties considered earlier in this opinion, our review of the trial court’s classification of these accounts as Gail’s nonmarital property is limited to whether this determination was contrary to the manifest weight of the evidence. In re Marriage of Gurda,
II. “Loan” to ITI
On cross-appeal, Gail challenges the trial court’s finding that the sum of $231,500 that she transferred to ITI between 1992 and 1995 was a gift to the marital estate (for which she was not entitled to repayment) rather than a loan. “[Pjroperty designated as nonmarital pursuant to the exceptions in section 503(a) may still be presumptively transmuted into marital property by the affirmative act of the contributing spouse. The transmutation doctrine is based on the presumption that the contributing spouse intended to make a gift of the property to the marital estate.” In re Marriage of Riech,
III. Maintenance and Child Support
On direct appeal, Martin challenges the amount of the trial court’s award of maintenance from Gail as insufficient. On cross-appeal, Gail challenges the maintenance award as excessive and an abuse of discretion. Gail further argues on cross-appeal that the trial court abused its discretion in relieving Martin of any child support obligations. In light of our disposition of the property questions in this case, we need not address these issues on appeal. See In re Marriage of Guerra,
IV Conclusion
We reverse the finding of the trial court that the “property at 4131 Terri-Lyn Lane” is Gail’s nonmarital property; we affirm the trial court’s classification of Gail’s business interests as her nonmarital property; we reverse the trial court’s finding that the investment accounts are Gail’s nonmarital property, and we affirm the finding of the trial court that the funds that Gail transferred to ITI were a gift to the marital estate rather than a loan and thus not subject to reimbursement. In light of the amount of marital property now subject to equitable distribution, we further direct the trial court to reconsider the issues of maintenance and child support in accordance with the appropriate provisions of the Dissolution Act. 750 ILCS 5/504, 505 (West 1998).
For the foregoing reasons, we affirm in part, reverse in part and remand the cause for further proceedings consistent with the views expressed in this opinion.
Affirmed in part and reversed in part; cause remanded.
McNULTY, EJ., concurs.
Notes
We decline to follow the rule set forth in the recent Second District case of In re Marriage of Blunda,
The parties’ stipulation that title to the house is held under the land trust is irrelevant. A stipulation cannot cure the faulty transfer of title from a settlor to a trustee. Without the proper delivery of title to the trustee under the land trust, Adreani failed to satisfy the required elements of an express trust with respect to the house. Kurtz v. Solomon,
Dissenting Opinion
dissenting:
I respectfully dissent from the majority. The conclusion that the majority reaches regarding the Northbrook home, declaring it to be marital property, is just plain wrong. Gail Didier, petitioner-appellee, in noncontradicted testimony stated that funds from Gail’s nonmarital condominium property were used to purchase the Northbrook home. The trial court’s finding that the Northbrook home is Gail’s nonmarital property is not an abuse of discretion, and the trial court’s conclusion is fair and reasonable and should be affirmed.
Further, in this instance, the property was kept separate and apart from marital property and held in a land trust with Gail being the sole beneficial owner of the trust. Section 503(a)(2) indicates when property is acquired in exchange for property acquired before the marriage, the property is to be known or classified as nonmarital property. Eroperty acquired during marriage in exchange for nonmarital property is also considered nonmarital, especially if the new property is held in the acquiring spouse’s name alone. In re Marriage of Smith,