APPEAL from the Circuit Court of Livingston County; the Hon.
CHARLES E. GLENNON, Judge, presiding.
MR. PRESIDING JUSTICE REARDON DELIVERED THE OPINION OF THE COURT:
Plaintiff, Robert Semmens, filed for divorce on April 25, 1973, and a divorce was granted in May 1973. The decree incorporated a property settlement agreement dated March 15, 1973, which provided, in part, that the plaintiff would pay defendant $500 a month in alimony. In July 1976, defendant filed a motion to show cause why plaintiff should not be held in contempt for failing to comply with the divorce decree's alimony provision. Plaintiff alleged in his answer that an addendum (dated May 3, 1973) to the March 15, 1973, agreement was merged into the decree, which addendum altered his obligation to pay the $500 per month as provided in the decree. Defendant moved to strike plaintiff's answer, alleging, in part, that the addendum was ineffective since it was not incorporated into the decree and it was too late to modify the decree. After a hearing, judgment order in favor of plantiff was entered on March 7, 1977. The trial court found that plaintiff was not seeking to modify the settlement agreement but was simply enforcing the entire, voluntary agreement between the parties. The trial court ordered that plaintiff is not in contempt for failing to make the decree payments, but he should make the payments required by the addendum, and that defendant is estopped from denying the validity of the addendum. Defendant appealed.
This court reversed the trial court's judgment and remanded the cause for a determination of whether fraud had been practiced on the trial court at the divorce hearing because the May 3 addendum to the property settlement agreement had not been disclosed to the judge. On remand, Judge Glennon again ordered that plaintiff was not in contempt of court for his failure to make the decree payments and held that no fraud was practiced on the court at the divorce hearing which was presided over by Judge Erlenborn. However, if there was fraud, the parties were in pari delicto; defendant was guilty of laches; and the doctrine of equitable estoppel precludes defendant's attack on the property settlement agreement.
The present appeal brought by defendant is restricted to the determination of a single issue: Whether the trial court's finding that fraud was not perpetrated on the court at the divorce hearing is against the manifest weight of the evidence.
At the February 1977 hearing on defendant's petition for rule to show cause, Mr. Trezise, the attorney who was representing plaintiff, testified that in January 1973, Robert Semmens contacted him to discuss the institution of divorce proceedings. In effect, Trezise informed both parties that because of his personal friendship with them, he would involve himself in the proceedings only if the parties were to agree to a divorce and arrive at a property settlement agreement in a mutually agreeable fashion.
The parties agreed on a property and alimony settlement and executed the March 15, 1973, agreement. That agreement provided, in part, that plaintiff was to pay defendant $500 per month as alimony until March 1, 1995; he was to pay child support; and he was to convey to her his interests in the marital residence subject to any mortgage indebtedness. Plaintiff was, by the agreement, to obtain certain commercial real estate in Pontiac, Illinois, in which both parties were interested as owners and lessors and on which real estate a retail business known as Semmens Drug Store was operated.
On May 3, 1973, the day before the divorce hearing, defendant was presented, read, and executed an addendum to the March 15, 1973, agreement. Plaintiff apparently had second thoughts about the terms of the March agreement and insisted upon a modification. The addendum provided, in part, that if defendant would ever sell the marital home prior to the full amortization of the mortgage, plaintiff's obligation to pay alimony would be terminated, and plaintiff would replace that obligation with a promissory note for the principal amount of the then outstanding mortgage balance. Defendant testified that she felt that the modification was not fair since plaintiff was going to receive the business real estate.
At the May 4, 1973, divorce hearing before Judge Erlenborn, defendant was not present or represented by counsel. Trezise had filed an entry of appearance and consented to default on her behalf. Plaintiff, represented by Trezise, submitted the March 15, 1973, settlement agreement but not the addendum. Plaintiff testified that he had agreed to pay defendant $500 a month alimony and acknowledged that "overall" the March 15 agreement was a fair and equitable settlement between the parties. The divorce decree consequently incorporated the March agreement but not the addendum.
At the February 1977 hearing on defendant's rule to show cause, Trezise provided the background of the property settlement agreement. Trezise testified that the parties agreed that defendant would receive the marital residence free and clear of any encumbrances. To effect this purpose, plaintiff agreed to pay defendant $500 a month, which Trezise characterized as the "so-called alimony payments," until the house mortgage indebtedness was fully amortized in March 1995. The $500 would be used for mortgage payments, insurance, taxes, and maintenance. Trezise testified that throughout the negotiations, the parties never referred to the payments as alimony; they referred to them as "house payments." Trezise called it alimony, however, for income tax purposes.
"I employed the term, alimony, for the simple reason that it would be an income tax deduction and also that by doing that, then Mrs. Semmens would be able to write the house payment check and the tax check and would be able to deduct those items. She could deduct the interest and the tax payment and the house payment and he could deduct the alimony payment and the difference between the two at the time when they had four children was not substantial."
Trezise went on to explain why the May 3 addendum was not disclosed to the court during the divorce proceeding:
"I didn't redo the marital agreement as I didn't want to, frankly, vary the fact that the marital settlement agreement referred to alimony payments because I was trying to achieve the tax benefits that would result in, and I didn't want to put of record that fact that when the house was sold there would be a change in the method by which the indebtedness on the house would be resolved. In other words, I didn't want to make a public record of the fact that these payments were, in fact, house payments for the very simple reason that I didn't want to lose the tax effect."
It seems that defendant either never received a copy of the decree or she misplaced it. She testified that in January 1976, after examining the court record, she realized that the May 3 addendum had not been incorporated in the decree for divorce and that it had not been referred to in plaintiff's testimony.
In June 1976, defendant sold her residence. Plaintiff continued making payments until June 1976, when he learned that defendant had sold the house. Defendant then filed the motion to show cause why plaintiff should not ...