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Spengler v. Spengler

OPINION FILED OCTOBER 12, 1977.

PRISCILLA P. SPENGLER, PLAINTIFF-APPELLEE,

v.

GEORGE P. SPENGLER, DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Winnebago County; the Hon. WILLIAM R. NASH, Judge, presiding.

MR. JUSTICE GUILD DELIVERED THE OPINION OF THE COURT:

This is a divorce case which illustrates the pitfalls that occur when an attorney, indirectly, seeks to represent both parties in a divorce proceeding. In this appeal defendant's counsel has zealously asserted that the attorney "considered himself to be a scrivener for the parties and that he did not represent either party in this matter," as will be explained below.

The two issues presented are, first, whether the court had jurisdiction to modify the divorce decree and, second, whether fraud on the part of the defendant was shown as a matter of law.

In June 1970, the plaintiff, Priscilla Spengler, and the defendant, George P. Spengler, met in the offices of the attorney who represented the George H. Spengler Company, the defendant's employer. After a number of meetings with the plaintiff and the defendant, the attorney for the Spengler Company drafted a property settlement agreement containing paragraph 11, which constitutes the issue herein. This document was signed by the plaintiff and the defendant on August 25, 1970. Paragraph 11 thereof provided that the plaintiff would receive 50% of any salary over $30,000 which the defendant received from the Spengler Company. Plaintiff discussed the August 25, 1970, property settlement agreement with attorney Kalivoda on several occasions. On February 3, 1971, plaintiff in substance severed her legal relations with Kalivoda. Although the testimony herein is not entirely clear as to dates, sometime during February or March 1971 the attorney for the Spengler Company drafted a new property settlement agreement which bears the date of January 31, 1971. Under the January 31, 1971, agreement paragraph 11 was changed to provide that defendant would cause the Spengler Company to pay plaintiff an amount equal to any salary exceeding $31,000 which he received from the company. Plaintiff was advised that this change was merely to secure a tax advantage for the defendant and plaintiff did not consult with independent counsel regarding the change. On May 14, 1971, the plaintiff filed a petition for divorce by and through the attorney representing the Spengler Company. A decree of divorce was entered on May 25, 1971, and the property settlement agreement dated January 31, 1971, was incorporated in the divorce decree.

On February 13, 1973, the board of directors of the Spengler Company held its annual meeting. Present at that meeting were the three board members, consisting of defendant, his father and a Mr. Liljedahl. Also present was the attorney for the corporation, who acted as secretary of the meeting. At that meeting the board unanimously voted to give defendant a salary increase of $8400 per year. The minutes of the meeting reflect that thereafter defendant moved to increase plaintiff's annual salary as vice president from $1000 to $8400 and that he voted for the motion. The other two directors voted against it and it did not carry. Plaintiff's salary from the company was continued at $1000 per year. Plaintiff was not present at this meeting nor was she notified of the action increasing the defendant's salary by the sum of $8400. She did not discover that defendant's salary had been increased until September 7, 1973, after her attorney made a written demand to examine the corporate records. On October 4, 1973, plaintiff filed a petition for rule to show cause, alleging that defendant had failed to comply with paragraph 11 of the property settlement agreement and had concealed his raise from her. Subsequently an amended petition was filed and on May 14, 1974, plaintiff filed a motion to modify paragraph 11 of the property, settlement agreement. An affidavit in support of the May 14 motion was filed later, on July 26, 1974. On August 7, 1974, the attorney for the Spengler Company notified plaintiff that she was discharged as vice president and she has received no salary since that date.

At this point we will consider the provisions of paragraph 11 of the property settlement agreement as originally drafted and as amended. Paragraph 11 of the property settlement agreement as originally drafted and signed on August 25, 1970, read as follows:

"The parties recognize that if their marriage were not now being terminated, Priscilla could reasonably expect to participate with George in any increased future earnings which he might realize as the managing executive officer of the Geo. H. Spengler Co. Accordingly, George agrees that if in the current or any future calendar year his compensation from the company shall exceed $30,000.00, he shall pay to Priscilla, as an additional installment of settlement moneys under Paragraph 10 hereof for such year, an amount equal to 50% of that part of his compensation from the company which exceeds $30,000.00."

The January 31, 1971, agreement signed by the parties reads as follows:

"The parties recognize that if their marriage were not now being terminated, Priscilla could reasonably expect to participate with George in any increased future earnings which he might realize as the managing executive officer of the Geo. H. Spengler Co. Accordingly, George agrees that if in the current or any future calendar year his compensation from the company shall exceed $30,000.00, he shall cause the company to pay to Priscilla as additional compensation for such year an amount equal to the compensation over $30,000.00 paid to him, except that for the years 1971 through 1975 his compensation from the company may be up to $31,000.00 before the provisions of this paragraph apply."

It is to be noted that the original paragraph 11 of August 25, 1970, provided specifically that the defendant himself would pay half of any increase in salary. It is also to be noted that this was changed specifically so that defendant would cause the corporation to do so rather than the defendant himself.

Plaintiff's affidavit filed July 26, 1974, in support of her motion to modify paragraph 11 of the settlement agreement alleged misrepresentation by the defendant of his ability to cause the Spengler company to pay any sums to her pursuant to that paragraph. After defendant answered the motion and filed his reply to the affidavit, an extended hearing was had on the motion and the affidavit. The judge in the trial court filed a memorandum opinion in which he found,

"Both parties appear to consider this matter as being heard under Section 72 of the CPA without objection."

The trial court then stated the question to be whether, pursuant to section 72 of the Civil Practice Act (Ill. Rev. Stat. 1973, ch. 110, par. 72), evidence of fraud was established which would allow the court to modify the property settlement agreement. The court further found:

"Both parties agree that the provision of the agreement before the Court cannot now nor could ever have been carried out by ...


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