Appeal from the Circuit Court of Cook County; the Hon. Henry
A. Gentile, Judge, presiding.
JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT:
Rehearing denied August 3, 1984.
This appeal is from an order of the trial court finding respondent in wilful contempt for failure to pay petitioner amounts admittedly due to her pursuant to the parties' settlement agreement incorporated in a judgment of dissolution of marriage. Respondent contends that: (1) the provisions in question were not enforceable through contempt proceedings; and (2) the order is improper because (a) the trial court did not find that his failure to pay was wilful and contumacious; and (b) the provision thereof that he could purge himself of contempt by paying $125,000 to petitioner was not based upon his ability to pay.
A judgment of dissolution of the parties' marriage was entered on October 7, 1980, and incorporated therein are the terms of their settlement agreement, which were approved by the trial court. Pursuant thereto, petitioner was awarded the marital home and furnishings therein; three automobiles; and items of personal property. Respondent was awarded his medical practice; sole ownership of the parties' interest in three buildings, one of which housed his medical practice, an automobile; his personal effects; and any income generated during his lifetime from property owned by the parties in Mexico, with title thereto to be held in trust for the benefit of respondent's children. In addition, respondent agreed to pay outstanding debts incurred during the marriage, including any tax deficiencies for the years 1978, 1979, and 1980, and to "indemnify and hold [petitioner] harmless from any liability therefrom." For her part, petitioner agreed to pay, out of the proceeds of sale, the outstanding $46,000 mortgage on the marital home, as well as a $70,000 note secured by an assignment of the beneficial interest therein, but respondent was to pay her $35,000 within three years as his portion of the liability on the note. The parties further agreed that petitioner would have custody of their minor child; that respondent would pay her $1,000 per month as support until that child reached the age of 18; and that respondent would pay college expenses for their four children. Finally, with regard to maintenance, the agreement provided:
"On or before six months from the effective date of this agreement, [respondent] shall pay to [petitioner] the sum of [$175,000] without interest, as a lump sum settlement in lieu of alimony or periodic allowance * * *."
The payment was to be "in full and complete settlement of all claims or rights held or asserted by [petitioner] for periodic allowance, support or maintenance past, present and future * * *." The judgment of dissolution also provided that the terms of the settlement agreement would be binding on the parties "as an order of Court," and that the court retained jurisdiction of the parties and of the subject matter until such time as the judgment was fully satisfied.
On August 25, 1982, petitioner filed a petition for rule to show cause why respondent should not be held in contempt, alleging that he had wilfully failed to pay her the $175,000 due under the agreement as a lump-sum maintenance award; that the Internal Revenue Service had seized $129,000 of her assets as payment of outstanding tax deficiencies; and that respondent had wilfully refused to reimburse her for that amount, in violation of his agreement to indemnify her therefor. In his answer, respondent admitted that the sums were due to petitioner and had not been paid, but denied that his failure to do so was wilful, asserting that he lacked the financial ability to pay.
The rule was entered and, after several continuances, a hearing was held on January 27, 1983, at which respondent, testifying as an adverse witness, acknowledged that he was familiar with the terms of the settlement agreement, which had been drafted by his attorney in accordance with details that he and petitioner had decided upon; that he had not paid petitioner the $175,000 due thereunder; and that, although he was aware that petitioner's account had been garnished in the amount of $129,000 for outstanding tax deficiencies, he had not reimbursed her therefor as required by their agreement. Respondent further stated that he was a surgeon, had practiced medicine since 1959, and had gross income of approximately $300,000 per year. He also identified a financial statement, prepared in February of 1982 and submitted to Pioneer Bank, which listed assets slightly in excess of $20 million in addition to his income and $10,000 in cash, but denied that the statement was accurate, despite his signature thereon attesting that the information was correct. Respondent further admitted the accuracy of a record of his checking account showing transactions between March of 1981 and October of 1982. That record revealed that deposits were made totaling $790,900, including a $232,000 deposit in March of 1982. Respondent next testified that he purchased a $250,000 house in late 1980 or early 1981, paying $15,000 and financing the remainder; that, at the time of his remarriage in June of 1981, he purchased luggage for $7,000 and flew to Monaco for a honeymoon, although he insisted that the trip cost him only $600; and that he purchased Tol-Tech Corporation, a medical corporation, in March of 1982 for $50,000, but asserted that he did not know the value of that company's receivables, and that the purchase was made in order to use the stock as collateral for a bank loan. He admitted that, in making the latter purchase, he used the name Alforrato rather than his own name, but alleged that he did so because he could no longer obtain credit in his own name. According to respondent, he had a friend named Alforrato living in Mexico, and that Alforrato gave him permission to use that name, but he further stated that he did not know whether Alforrato had any deposits or assets in this country which would establish his credit.
Later, testifying in his own behalf, respondent stated that he had complied with other provisions of the decree, including turning over the marital home and furnishings, as well as three automobiles, to petitioner; paying outstanding debts in the amount of $40,000 to $50,000; and paying college expenses of $40,000 per year for their children. He also asserted that, at the time the settlement was entered into, he expected to receive a $200,000 tax refund for the years 1978 through 1980, which he planned to use to pay petitioner, but he later learned that he owed $250,000 in taxes. Respondent further testified that the checking account identified earlier was his business account, and that there was very little left of his income after disbursements were made therefrom; he did not know what his net profit was, but estimated that he had, at most, $700 left at the end of each month after paying expenses. With regard to the $232,000 deposit in March of 1982, respondent asserted that he was not sure where that money came from, but speculated that it was the proceeds of a loan necessary to pay amounts due to the Internal Revenue Service. Respondent next testified that his real estate had a total value of $450,000, not the $20 million reflected in the financial statement, and that all of the property was mortgaged to its full value; that one building, in which he had a one-half interest, was subject to two mortgages, but he did not know what the equity therein was; that another building he owned had a value of $45,000 to $50,000, but was subject to a $30,000 mortgage; that he was willing to turn over to petitioner all of his real estate and jewelry, which he valued at $100,000, in exchange for a release; that he had borrowed $80,000 against Tol-Tech stock in order to pay taxes; and that he owed $60,000 in taxes for 1981 and 1982.
On cross-examination, respondent acknowledged that the financial statement showed that the building in which he held a one-half interest had a value of $800,000 and was subject to a $100,000 mortgage. He further stated that he had no evidence of the amounts he claimed to have paid to the Internal Revenue Service, and admitted that, although he termed the checking account a "business" account, he paid personal expenses such as his mortgage and the children's college expenses therefrom.
The trial court found that respondent was in contempt of court, and, after several continuances, ordered that he be committed to the Cook County jail for 90 days, but stayed issuance of the mittimus for one month, stating that respondent could purge himself of contempt during that period by paying petitioner $125,000. Respondent's motion to reconsider was denied, and this appeal followed.
• 1 Respondent first contends that contempt was not an appropriate remedy in the instant case, where the provision of the decree to be enforced provided for a lump-sum maintenance award. He acknowledges that section 502(e) of the Illinois Marriage and Dissolution of Marriage Act (Ill. Rev. Stat. 1979, ch. 40, par. 502(e)) specifically provides that the terms of a settlement agreement which are set forth in a judgment "are enforceable by all remedies available for enforcement of a judgment, including contempt," but argues that, under certain circumstances, the trial court may not enforce a judgment through contempt proceedings, despite a finding that the failure to comply with the decree's provisions was wilful.
In support of his position, respondent relied solely on Fox v. Fox (1978), 56 Ill. App.3d 446, 371 N.E.2d 1254. There, the trial court had found the respondent in wilful contempt for his failure to abide by provisions of the divorce decree regarding child support payments, and sentenced him to 90 days in jail with the proviso that he could purge himself of contempt by paying the petitioner $2,000. The fifth district reversed that order, adopting the rule followed by courts> in other States that, where the children for whose ...