Lead Opinion
On Nоvember 12, 1986, Barbara Hart, age 42, filed a petition for dissolution of her marriage to Robert Hart, age 52. On September 11, 1988, the trial court entered an order dissolving the marriage, dividing marital property, setting child support, and denying maintenance. Petitioner appeals, arguing the trial court abused its discretion in not awarding her one-half of respondent’s pension, the trial court erred in calculating respondent’s net income for purposes of child support, and the trial court abused its discretion in denying her rehabilitative maintenance.
We reverse and remand.
Background
The parties were married on
INCOME
Petitioner is a registered nurse. After her marriage, she worked part time until her first child was born. Subsequent to the birth of her children, she worked part time training horses and riders. In November 1987, she began work as a staff nurse at a nursing home. She earns $10 per hour and nets $860 per month. She works 56 hours every two weeks during the daytime. Petitioner testified she wanted to improve her skills and return to school. She wanted to earn a bachelor’s degree in nursing so she would be able to apply for a supervisory position or better paying position. She investigated
Petitioner requested she be awarded the marital home. She stated she could not afford the $1,217 monthly mortgage, tax, and insurance payment. She contributed $500 per month to the home and it would cost her a similar amount to rent a home.
Respondent is a surgeon and was a partner in Link Clinic. He had been associated with Link Clinic since 1978. Respоndent and petitioner’s
Doehring stated respondent’s net income for purposes of this case was $58,272. Doehring admitted that he had subtracted $16,000 of the income tax liability twice and that this was not sound accounting practice. Doehring testified respondent’s gross income in 1988 would be $6,000 to $8,000 less than his gross income in 1987.
Link Clinic merged with Carle Clinic in 1988. All of the agreements had not been signed as of the day of the hearing. However, respondent was guaranteed a minimum gross salary of $140,000. As part of the merger, respondent was responsible for malpractice insurance premiums totalling $100,000. His partnership share in Link Clinic, valued at $38,962, was used to offset part of the liability. The balance would be deducted from his salary from Carle Clinic in installments of $23,000 the first year and $25,000 the second year. Respondent testified that it was possible he could generate income above the minimum salary. Carle Clinic had a pension and profit-sharing program. However, respondent was uncertain about the specifics of this program. The merger with Carle Clinic was a business decision, which would eliminate future competition and protect his income.
ASSETS AND LIABILITIES
The parties submitted statements of marital assets and liabilities. The value of several items of personal property varied in the documentation submitted to the trial court. The following table roughly summarizes the information. All of the marital debt is not summarized.
Value Indebtedness
$ 92,500 $ 87,342 (first mortgage) Marital home
24,000 27,604 (first mortgage acreage; second mortgage marital home, hereinafter second mortgage) Adjoining 10-acre tract and barn
disputed 4,500 1978 Porsche
disputed 1981 Dodge
disputed 1978 Truck
disputed 1972 Ford
unvalued three horses
3,677 IRA’s
Disputed Household furnishings
800 Equipment
38,962 Interest in partnership
96,393 +1988 сontribution of $12,000 to Pension profit share
15,000
Unsecured creditors 310 per month
(Until August 1989)
Respondent testified that the loan repayment amount subtracted from his income by Doehring was for the repayment of business debts. He and petitioner borrowed money from several sources to finance the purchase of airplanes for investment purposes. Part of the loan was also to purchase the 10-acre tract and barn. The primary loan was secured by a second mortgage on the marital home and a first mortgage on the 10-acre tract (hereinafter referred to as second mortgage). Respondent stated this was a business loan. He borrowed an additional amount of money for the 10 acres. The debt to the Mat-toon National Bank was for a second plane. The third debt was for use tax on a twin-engine plane. The monies borrowed from the insurance companies against policy benefits were for living expenses. As an adverse witness, respondent admitted he did not have the various amounts of money and loans segregated in his mind.
Petitioner admitted the ranch operation and the plane were shown as business investments for tax purposes. Petitioner stated she reluctantly agreed to purchase the twin-engine plane and signed the notes. However, she felt respondent bought the plane because he loved flying. Respondent was not qualified to pilot the twin-engine plane.
The trial court in a letter to the parties stated the primary problem was whether the home with the acreage should be sold to pay debts or retained by the petitioner. The court noted the children should, if possible, live in the family home. Respondent was the primary source of the parties’ income as well as the primary sоurce of the debts. The court then stated that if it were best for the children to live in the family home, it was best that respondent have exclusive rights to his pension. The letter offered respondent several options.
On September 11, 1988, the trial court entered an order dissolving the marriage and awarding custody of the children to petitioner. The court found respondent was the primary source of income for the family, the main cause of some of the debts, and would be the main source of college funds for the children. The court stated that since respondent must pay the bulk of the debts, he was given a choice of various property division options.
Petitioner was awarded possession of the home and acreage until Shannon was 18 years old and out of high school. Petitioner received the furnishings and equipment, except the cut glass vase and the furniture respondent brought into the marriage. She received the vehicles except the Porsche.
Respondent was ordered to pay the mortgage, taxes, insurance, and repairs on the marital home. The marital home was to be sold after Shannon reached 18 years of age and was out of high school. The equity was to be divided equally between the parties. Respondent received the mortgage interest deduction, pension through the clinic, and Porsche, subject to its debt. The court noted respondent was to receive any interest from his partnership share in Link Clinic. In discussing child support, the court found the partnership interest was a wasted asset since it would be used to pay respondent’s insurance
The court set child support at $1,760 per month until September 1989, $1,825 per month until September 1990, and then at $2,180 per month. The court based the $1,760 figure on a projected net income of approximately $65,872 as suggested by resрondent. The court ordered respondent to maintain his existing insurance policies, with existing beneficiaries, and to maintain adequate medical insurance for the children. The court further ordered respondent to pay $3,415.70 to petitioner’s attorney and $1,428.70 to petitioner’s certified public accountant. Finally, the court denied maintenance, other than property in lieu of maintenance. The court noted petitioner was capable of working full time but chose not to do so. Subsequently, the court denied petitioner’s motion for reconsideration.
Opinion
Initially, petitioner argues the trial court’s division of marital property was inequitable, and the trial court improperly applied the factors stated in section 503(d) of the Illinois Marriage and Dissolution of Marriage Act (Act) (Ill. Rev. Stat. 1987, ch. 40, par. 503(d)). Petitioner contends the pension and profit-sharing plan was the only real asset in the parties’ possession, since the marital residence and adjoining acreage were encumbered. Therefore, respondent received both his interest in Link Clinic and the pension and profit-sharing plan. Petitioner did not determine the value of her use of the marital residence.
Respondent argues the benefit of living in the marital home has worth- which must be calculated. Respondent secondly argues the interest in Link Clinic is not property which the respondent received because he received no value for it. Respondent contends the division was not an abuse of discretion.
In her reply brief, petitioner contends the court must calculate the present cash value of living in the marital home and the detriment to respondent, as well as the probable increase in the pension. Petitioner then contends the tax consequences and present cash value of alternative dispositions must be calculated.
Section 503(d) of the Act allows the сourt discretion to divide marital property in what it considers just proportions, considering listed factors and all other relevant matters. (Ill. Rev. Stat. 1987, ch. 40, par. 503(d); In re Marriage of Benz (1988),
The touchstone of a proper aрportionment is whether it is equitable in nature. Each case must rest upon its own facts. (In re Marriage of Bentivenga (1982),
The trial court abused its discretion in the instant case. First, the trial court did not consider the рartnership interest in Link Clinic, $38,962, as an asset having real worth. Respondent applied that value to reduce his insurance liability debt, which was incurred as a part of the merger of Link Clinic with Carle Clinic. The merger was not finalized at the time of the dissolution, but its terms were set. Generally, property acquired after marriage, with certain inapplicable exceptions, is presumed to be marital property. (Hofmann v. Hofmann (1983),
Respondent concedes the value of the partnership interest in Link Clinic was a marital asset. Section 503(d)(1) of the Act (Ill. Rev. Stat. 1987, ch. 40, par. 503(d)(1)) provides the court shall divide marital property in just proportions, considering relevant factors. Among those factors is each party’s contribution to or dissipation of the marital property. “Dissipation” is use of marital assets for one spouse’s sole benefit or for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown. (In re Marriage of Partyka (1987),
The evidence below clearly established respondent’s use of the marital asset for his individual benefit. In essence, petitioner’s interest in a marital asset was treated as a nullity because respondent chose to apply the asset to his individual insurance liability, rather than receive a cash payment for it. The partnership interest did not lose its value as a marital asset subject to distribution when it was used to retíre a debt. Failure to correctly consider disposition of the pаrtnership interest renders the property division an abuse of discretion. Partyka,
Petitioner argues the trial court failed to adequately consider the factors stated in section 503(d) of the Act (Ill. Rev. Stat. 1987, ch. 40, par. 503(d)). Petitioner contends she is entitled to a portion of the pension plan. The trial court in dividing marital property balanced the benefit to petitioner of living in the marital home until Shannon is 18, free of mortgage, taxes, and insurance payments, and her freedom from marital debts, with respondent’s obligation to maintain the payments and retire marital debts. The trial court properly considered the joint debt of the рarties as a factor offsetting the award of property. (In re Marriage of Ackerman (1988),
The petitioner did not offer such analysis to the trial court. A reviewing court will not reverse and remand for further proceedings where the parties had an opportunity to present evidence to the trial court but failed to do so. (Benz,
Petitioner next argues the trial court erred in calculating child support by using past rather than future income and by allowing a deduction for certain debts. Respondent argues future income for child support purposes is speculative and the trial court correctly deducted amounts used to generate income.
Section 505 of the Act provides for the imposition of child support obligations and determines the amount based upon statutory criteria. The minimum amount for the support of three children is 32% of the supporting party’s net income. (Ill. Rev. Stat. 1987, ch. 40, par. 505(a)(1).) “Net income” is defined as total income from all sources, minus: (a) Federal tax; (b) State income tax; (c) social security; (d) mandatory retirement contributions; (e) union dues; (f) dependent and individual health insurance premiums; (g) prior obligations of support paid pursuant to court order; and (h) expenditures for the repayment of debts that represent reasonablе and necessary expenses for the production of income. Ill. Rev. Stat. 1987, ch. 40, par. 505(a)(3); In re Marriage of Adams (1988),
Respondent began employment as an associate of Carle Clinic on the date of the hearing. He testified his guaranteed minimum gross salary was $140,000. Petitioner urges this court to take the $140,000 salary less taxes and social security and use the resultant figure as the base salary for support calculations. Petitioner’s argument does not consider deductions for health insurance, deductions for business expenses, and debts. The trial court did not err in using the 1987 income figure as the base for calculating child support amounts.
Petitioner next argues the court erroneously allowed respondent to deduct his 1987 taxes and an amount borrowed to pay those taxes from his gross income. The record does not support this contention. Although Doehring subtracted the taxes and a $16,000
Petitioner next contends allowing deductions from gross income for debts incurred for the purchase of the twin-engine plane and threе other debts was improper. Petitioner contends these were not business debts. The trial court specifically found the plane was purchased as a business investment. Part of the money borrowed for the plane and adjoining acreage was secured by the second mortgage on the home and the first mortgage on the acreage. Petitioner in her testimony agreed the plane was shown as an investment on tax returns. The parties also boarded horses, trained riders, and used the ranch operation as a business deduction. Respondent testified that the amount of the second mortgage was used for the planе and the ranch. Thus, we cannot find the trial court’s determination that these were business debts is contrary to the manifest weight of the evidence.
Petitioner next contends the trial court allowed a deduction for all unsecured ordinary debts as combined in the bankruptcy proceeding. The record does not support this conclusion. Respondent proposed deductions for four debts from his gross income. One involved the second mortgage, incurred to purchase the plane and ranch. The other three involved the plane and tax liability on the plane. The trial court did not err in finding these were expenditures for reрayment of debts incurred to produce income.
However, under the facts presented by the instant case, we believe the amounts should not have been deducted from respondent’s income for purposes of calculating his child support obligation. Here, respondent received the bulk of the marital assets because he had the duty to repay marital debt. Thus, deducting amounts used to repay a portion of the marital debt from income for purposes of child support allows respondent a double benefit. The property awarded to him could have been used to repay these debts. Thus, the triаl court erred in determining net income for purposes of child support.
Additionally, we note the figures used by the trial court based on respondent’s income in 1987 included a deduction of $23,370 for nonrecurring income. Section 505(a)(1) of the Act does not provide for a deduction of nonrecurring income in calculating net income for purposes of child support. (Ill. Rev. Stat. 1987, ch. 40, par. 505(a)(1).) We note that on remand respondent’s actual income for 1988 will be available for use by the court in its child support determination. The trial court’s responsibility is to determine child support payments as
Petitioner next argues the trial court’s order denying her $500-a-month rehabilitative maintenance for two years is contrary to the manifest weight of the evidence. Petitioner stated she needed the award to return to school and update her degree. An award of maintenance is within the discretion of the trial court and will not be reversed on appeal unless it constitutes an abuse of discretion or is against the manifest weight of the evidence. (In re Marriage of Zummo (1988),
For the above reasons, we reverse the trial court and remand for further proceedings consistent with this disposition.
Reversed and remanded.
Concurrence Opinion
specially concurring:
I concur in the opinion reached by the majority of the court. I write separately because I believe the inequities in this case are representative of similar inequities that occur all too frequently in dissolution proceedings in this State, particularly with regard to maintenance.
Maintenance is an important part of the public policy of this State and ought not be viewed with disfavor. As the majority states in its opinion, an award of maintenance is within the discretion of the trial court and will not be reversed on appeal unless it constitutes an abuse of discretion or is against the manifest weight of the evidence. I conclude the trial court in this case grossly abused its discretion.
Section 504 of the Illinois Marriage and Dissolution of Marriage
A proper understanding of when maintenance is apprOpriaté under section 504(a) may be obtained from the description-of the factors to be considered under section 504(b) in determining the amount of maintenance to be ordered. (Ill. Rev. Stat. 1987, ch. 40, pars. 504(a), (b).) According to section 504(b), maintenance should be sufficient tо provide the spouse seeking it with the standard of living established during the marriage, except where the financial situation of the paying spouse, the duration of the marriage, or the health of either party indicates otherwise. (Ill. Rev. Stat. 1987, ch. 40, par. 504(b).) It makes no sense to say that a party is not entitled to maintenance because she is able to support herself at some level of subsistence, and then to say that if she is entitled to maintenance, it should be in an amount consistent, among other factors, with “the standard of living [established] during the marriage.” See In re Marriage of Holman (1984),
In the instant case, after 18 years of marriage and three children, petitioner filed a petition for dissolution. She then began to work part time as a staff nurse at a nursing home, netting only $860 per month. Although she indicated a desire to return to school to obtain a bachelor’s degree in nursing, she had no income to achieve this goal (much less support herself) in the standard of living that she had grown accustomed to as the wife of an established surgeon. Respondent, on the other hand, has substantial income. As a surgeon affiliated with the Carle Clinic of Urbana, respondent had a guaranteed minimum gross salary of $140,000, starting in July 1988, and has the potential to earn much more.
At oral arguments, respondent’s counsel was asked to consider the respective positions of these parties four years after the dissolution of their marriage. He conceded that under the best possible circumstances, petitioner might be able to gross $40,000 a year as a nurse, while under the worst possible circumstances, respondent
Immediately prior to the dissolution of their marriage, these parties had a partnership in marriage. Viewed in a light most favorable to respondent, four years after the dissolution of that partnership, the former partners will be earning a combined gross income of $180,000. However, at best, petitioner is to receive only 22% of the former partners’ total earnings. Respondent gets to enjoy the remaining 78% and need not suffer through retraining, as petitioner must, in order to get it.
Marriage is a partnership, not only morally, but financially. Spouses are coequals, and homemaker services must be recognized as significant when the economic incidents of divorce are determined. Petitioner should not be penalized for having performed her assignment under the agreed-upon division of labor within the family. It is inequitable upon dissolution to saddle petitioner with the burden of her reduced earning potential and to allow resрondent to continue in the advantageous position he reached through their joint efforts.
What makes the denial of maintenance in this case all the more egregious is the quality of life which all of the members of this family enjoyed prior to the dissolution of marriage and which respondent will still continue to enjoy. A few of the more notable features of how they lived prior to the dissolution (and prior to a bankruptcy in 1986) are the following: a marital home with an adjoining 10-acre tract and barn and three horses maintained thereon; four motor vehicles, including a 1978 Porsche; and several airplanes purchased over thе years (including one twin-engine plane) for the respondent, who is a pilot.
On remand, the trial court has been directed to take additional evidence to ascertain the current and future financial status and needs of both parties. In doing so, I conclude the trial court may use income potential rather than actual income on the date of the hearing (In re Marriage of Mittra (1983),
As stated earlier, section 504(b) directs that maintenance “shall be in such amounts and for such periods of time as the court deems just.” (Ill. Rev. Stat. 1987, ch. 40, par. 504(b).) That section further directs the court to consider the following factors, inter alia, in deciding the amount of maintenance:
“(1) [T]he financial resources of the party seeking maintenance *** and his ability to meet his needs independently ***;
(3) the standard of living established during the marriage;
(4) the duration of the marriage;
(5) the age and the physical and emotional condition of both parties; [and]
(6) thе ability of the spouse from whom maintenance is sought to meet his needs while meeting those of the spouse seeking maintenance.” (Ill. Rev. Stat. 1987, ch. 40, pars. 504(b)(1), (b)(3), (b)(4), (b)(5), (b)(6).)
On remand, the above-quoted factors should be the particular focus of the trial court’s attention. By so focusing, the trial court will be better able to place these parties in positions of equity with regard both to their present financial circumstances and their future financial circumstances as well.
The denial of maintenance in this case is outrageous. In my judgment, petitioner’s original request for maintenance was too paltry a sum; that she did not even get what she requested reveals the need for trial courts and the bar to reexamine attitudes too often brought to the resolution of the issue of maintenance.