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In Re Marriage of Peshek

OPINION FILED NOVEMBER 3, 1980.

IN RE MARRIAGE OF PHYLLIS M. PESHEK, PETITIONER-APPELLEE, AND TIMOTHY J. PESHEK, RESPONDENT-APPELLANT.


APPEAL from the Circuit Court of Cook County; the Hon. RENE C. GOIER, Judge, presiding.

MR. JUSTICE CAMPBELL DELIVERED THE OPINION OF THE COURT:

Timothy J. Peshek (hereinafter respondent) brings this appeal from the entry of a judgment of dissolution by the circuit court of Cook County and from an order denying his motion seeking leave to file a third-party complaint to determine his rights in a parcel of residential property which he alleged was marital property. The respondent's main contention is that the trial court should have granted him leave to file his third-party complaint and that its failure to do so requires a redetermination of the award for maintenance, support, and attorney's fees. The respondent also asserts that, even disregarding the issues relating to the marital home, the trial court's awards for maintenance, child support, and attorney's fees are erroneous. No issue is raised as to the grant of the dissolution.

We reverse and remand.

The petitioner, Phyllis M. Peshek, filed a petition for dissolution of marriage on February 8, 1978, in the circuit court of Cook County. The respondent filed an answer denying the allegations of the petitioner. Subsequently, he sought leave to file a third-party complaint against the petitioner's parents, Mario and Marie Maida, and the Amalgamated Trust and Savings Bank as trustee under trust No. 3530. The third-party complaint alleged that the parties had purchased a lot in Barrington in 1973 for $13,500 and had built a home thereon in 1978 with a present value of $300,000. Respondent, an electrician by trade, acted as general contractor on the house, and he and his friends did most of the work on it. A certain unspecified but substantial amount was borrowed from the Maidas to purchase necessary construction materials. According to the third-party complaint, the home was deeded to the Maidas when the parties were encountering marital problems. While the parties' intent in this transfer is unclear, the respondent alleged that the Maidas were to hold the home in trust for the parties. The third-party complaint also alleged that subsequent to this transfer the home was placed in trust presumably with the Maidas as the beneficiaries. The respondent alleged that the beneficial interest of the trust was the sole marital property of the parties but that the Maidas were entitled to payment of the sum they advanced the parties. He sought the sale of the beneficial interest, payment of the Maidas and equal division of the proceeds. When the trial court denied the respondent's motion to file this third-party complaint, he filed suit in the chancery division on the court's suggestion.

On December 14, 1978, the trial court ordered respondent to pay petitioner $100 per week temporary child support and $200 back support. After a hearing on the grounds, a dissolution was orally granted on February 21, 1979. A second hearing concerning the distribution of the parties' marital property, maintenance, child support, and attorney's fees was held on June 4, 1979. During this hearing, the respondent again attempted to place the issue of the Barrington property before the court. At that time, the trial court indicated that it was its view that without having the real estate before the court, it was unable to make a determination as to maintenance or child support. In an attempt to avoid this problem, the trial court requested the parties to stipulate that the court could disregard the Barrington property in making its award. Although no stipulation was made, the court decided to make property, support, maintenance, and attorney's fees awards.

The following facts which are pertinent to the issues raised on appeal were disclosed at the two hearings. The parties were married for 14 1/2 years and had two children, a boy 14 and a girl 11. The only marital debt other than the amount owed to the Maidas was a $102 dental bill for the children. Assets included a $4,000 bank account which the parties split at the time of their separation, household furnishings which were also split and the family car, a 1972 Lincoln Mark IV, which was in the respondent's possession at the time of the hearing.

The parties both testified as to their employment and financial pictures. Petitioner testified that she and the two children were presently living with her parents in the Barrington home. She had an agreement with them to pay $300 per month for food and rent, but had been unable to meet this obligation during the 20 months she had lived with them. She testified that she did not attempt to find an apartment because she did not think that she could find one for less than the $300 charged by her parents. Petitioner also testified that she worked two days a week in a beauty shop earning $60 to $80 per week. She also worked at a friend's beauty shop sometimes but received no compensation for this. She testified that she needed $200 per week to support herself and the two children. She noted that her son encounters extraordinary expenses because of his involvement in sports.

Respondent testified that he is an electrician but, because he does not have full union status, his card is "pulled" when there is not enough work. During the parties' marriage, respondent generally worked a full-time job and a part-time job. His 1978 tax return indicated a gross income of $27,000 of which $1,685 constituted income which he received as an independent subcontractor. The $27,000 also included $2,300 back pay for previous years. It should be noted that it was during 1978 that the respondent built the Barrington home. The respondent further testified that, whereas in 1978 he lost only a day or so due to bad weather, in 1979 he lost three months due to bad weather. During that time he drew unemployment compensation of $135 per week. Due to this circumstance, his average pay for the first 20 weeks of 1979 was $221.40 per week. At the time of the hearing respondent was earning $12.25 an hour, according to his testimony, but was not receiving any overtime.

After having considered all of the evidence, the trial court entered a judgment of dissolution on June 20, 1979. The judgment granted the dissolution, awarded custody to petitioner, awarded petitioner $1,300 in back child support, ordered all existing life insurance policies to designate the minor children as irrevocable beneficiaries during their minority, awarded each party a one-half interest in the 1972 vehicle, awarded attorney's fees of $2,000, awarded $1,000 per month as unallocated maintenance and child support, and ordered respondent to pay the outstanding dental bill and to maintain hospitalization benefits for the children during their minority. The judgment also provided that it would "be reviewable upon the termination and respective rights" of the parties with regard to the present litigation pending in the chancery division. In denying the respondent's post-trial motion, the trial judge told the parties that he had been against proceeding to any final determination in the case without consideration of the Barrington property and that it was his belief that the court should have jurisdiction over that matter. The trial court then explained that it had only made the instant award because the parties stipulated that he could ignore the Barrington property. After the post-trial motion was denied, the respondent filed this appeal.

The respondent's main contention in this appeal is that the trial court erred in denying him leave to file his third-party complaint because section 503 of the Illinois Marriage and Dissolution of Marriage Act (Ill. Rev. Stat. 1977, ch. 40, par. 503(c)) dictates that the trial court divide all the parties' marital property in just proportion and because neither the Illinois Marriage and Dissolution of Marriage Act nor the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, par. 1 et seq.) prohibits the filing or consideration of the third-party action in the dissolution proceeding. In contrast, the petitioner asserts that the trial court's action was proper because the court had no general equity power to entertain the third-party action, as it was limited in the exercise of its authority to its specific statutory grant.

The decisive question which we must determine is whether the circuit court was required to entertain respondent's third-party action regarding the parties' property rights in the Barrington property during the dissolution proceeding. Section 503 of the Illinois Marriage and Dissolution of Marriage Act provides for the court to first characterize the parties' property in just proportion considering all relevant factors. (In re Marriage of Aschwanden (1980), 82 Ill.2d 31, 411 N.E.2d 238.) Property earned or obtained subsequent to the marriage and prior to its dissolution, unless specifically excepted by the Act, is marital property. (Ill. Rev. Stat. 1977, ch. 40, pars. 503(a), (b); In re Marriage of Hunt (1979), 78 Ill. App.3d 653, 397 N.E.2d 511.) The relevant factors to be considered under section 503 include the contribution or dissipation of each party in the acquisition of the marital property, the value of the property distributed to each spouse, and the relevant economic circumstances of the parties. Ill. Rev. Stat. 1977, ch. 40, pars. 503(c)(1),(2),(4).

• 1 It is clear from the record that the trial court failed to consider whether the Barrington property was marital or non-marital property despite the court's statement that such a consideration was a necessary prerequisite to a determination of the remaining issues in the case. In determining whether this omission was error, we must first decide whether the alleged interest in the Barrington property can be characterized as "property" under the Act. If not, the court was under no obligation to consider it under section 503. The issue may be restated by asking whether the parties' alleged interest in the property is a present property right subject to division between the spouses rather than a mere expectancy. The court in In re Marriage of Hunt (1979), 78 Ill. App.3d 653, 660, 397 N.E.2d 511, quoting In re Marriage of Brown (1976), 15 Cal.3d 838, 845, 544 P.2d 561, 565, 126 Cal.Rptr. 633, 637, stated that an expectancy interest is the "interest of a person who merely forsees that he might receive a future beneficience, such as the interest of an heir apparent * * * or of a beneficiary designated by a living insured who has a right to change the beneficiary." Generally, a house obtained by the parties during the marriage is marital property. Here the parties' interest in the Barrington property is less than certain because of the parties' action in deeding the property to the Maidas. At best, the property can be considered a potential or alleged asset. It is possible that a hearing on this issue would result in a finding that the parties have no interest in the property because they deeded the house to the Maidas as a gift or to repay them for the money lent to the parties to build the home. However, the fact that the parties' interest in the house is undetermined does not mean that it is a mere expectancy because, unlike an expectancy interest, the respondent's interest can be presently determined. (See In re Marriage of Kaladic (1978), 41 Colo. App. 419, 589 P.2d 502.) Accordingly, we conclude that the parties' interest in the Barrington property can be characterized as "property." Moreover, as the respondent's third-party complaint alleged that the property was bought during the parties' marriage and the construction of the house also occurred during the marriage, it is clear that if these allegations are taken as true the property is marital property.

• 2, 3 Having reached this conclusion, we must next determine whether the court was authorized to bring in the Maidas and the bank as third-party defendants to probe the validity of the trust during the dissolution proceeding. This appears to be a question of first impression in Illinois. The Illinois Marriage and Dissolution of Marriage Act makes no provision for the filing of a third-party action during a dissolution proceeding to determine the parties' rights in alleged marital property held by a third person. The right to file third-party actions in a dissolution proceeding has been recognized, however, where an alleged asset was held in trust. (See Demos v. Demos (1972), 8 Ill. App.3d 906, 290 N.E.2d 304; England v. England (1922), 223 Ill. App. 549; In re Marriage of Kaladic.) Kaladic is analogous to the instant case. There the wife placed a large sum of money into an irrevocable, discretionary spendthrift trust prior to the filing of a suit for dissolution and made herself the sole income beneficiary. Her attorney was made the trustee of this trust. The court held that it was necessary to look at the trust to determine whether it contained any marital property. It determined that it contained both marital and non-marital funds and, therefore, required conveyance of a portion of the trust assets to the husband as part of his portion of the marital property. The trial court acknowledged that it had the right to bring in the attorney-trustee as a third-party defendant, and that, indeed, such an act would be necessary to obtain jurisdiction over the trustee. However, because the attorney had been present in court representing the wife throughout these proceedings and appeared to submit to the court's jurisdiction, the trial court found it unnecessary to bring him formally into the action by the means of a third-party complaint. We agree with the court in Kaladic that a third-party holding alleged marital property should be brought into the dissolution proceeding by a third-party complaint and proper summons unless special circumstances exist as in Kaladic. We do not accept the petitioner's suggestion that Kaladic is distinguishable from the present case, because there the wife conveyed the property without her husband's knowledge. The section 503 requirement that all the marital property be distributed would not appear to support distinguishing cases on the basis of how the property came into the hands of the third person who presently holds it.

Our conclusion that the trial court had the authority to entertain the third-party action is supported by the Civil Practice Act. (Ill. Rev. Stat. 1977, ch. 110, par. 25.) The Civil Practice Act sets forth the rules of civil practice to be followed in the absence of a more specific statutory provision as to a particular civil practice. (Ill. Rev. Stat. 1977, ch. 110, par. 1.) Section 25 specifically provides for the filing of third-party actions where ...


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