Appeal from the Circuit Court of Cook County; the Hon. Daniel
J. Ryan, Judge, presiding.
JUSTICE LORENZ DELIVERED THE OPINION OF THE COURT:
Petitioner appeals from the denial of her motion to modify or vacate the final judgment in this dissolution of marriage action. She challenges the classification, valuation and apportionment of property; the trial court's failure to award maintenance; the adequacy of child support; and the failure to provide for college education. For reasons set forth below, we affirm in part, reverse in part and remand this cause to the circuit court for further proceedings.
The parties were married April 8, 1960, and had four children, of whom two were minors at the time judgment was entered. Grounds for dissolution, custody and visitation were uncontested; the financial aspects of the dissolution were tried in the circuit court of Cook County during June of 1982. The preponderance of trial testimony addressed the nature and value of a voting trust agreement which represented 14,373 shares of stock in Furst & Furst Corporation, a collection company. The parties stipulated that in 1961, petitioner's father, Louis Lewis, transformed his then sole proprietorship into a corporation and issued 10,000 shares of stock. Of the original issue, petitioner's name appeared on 2,000 shares; these shares split in 1967 and became 14,373 shares, the marital or non-marital nature and the value of which were subjects of dispute. Additional shares of Furst & Furst, given in the mid-1970's, were stipulated to be the non-marital property of petitioner.
Stipulations were also entered concerning: the $150,000 value of the marital residence in Lincolnwood; marital accounts at the time of petition totaling $119,000; the equity value in respondent's Morton Grove residence purchased with $30,000 from the marital accounts; jewelry, fine art and silver at the Lincolnwood residence valued in an insurance policy at $74,129; and the terms of certain trusts for the benefit of the children. Tax returns, insurance policies, stock alienation and other agreements were stipulated for admission into evidence, subject to cross-examination of witnesses. The parties stipulated to a letter, dated June 1, 1982, from American National Bank, stating that records from 1961 through 1970 no longer existed.
Respondent testified that he owned and operated Continental Collections, Incorporated, a collection company formed by him in 1976. He stated that the only funds he received from the company were repayments of loans, about $11,000 in the preceding year, and reimbursements of business expenses. Concerning the Furst & Furst stock, respondent testified that he and petitioner had discussed a purchase with petitioner's father in 1961 or 1962, and respondent recalled handing a check to petitioner's father in exchange for the stock. He stated that the check was drawn on the American National Bank from funds received as wedding gifts and deposited in joint checking and savings accounts. Respondent said that he could not recall who wrote the check or the amount of the check.
Petitioner testified that she had a bachelor's degree in education and was certified to teach, but that she had not taught for over 11 years. She stated that her current part-time employment at Furst & Furst paid about $75 weekly. As to the family standard of living, she testified that the family owned horses, employed domestic help, purchased clothing at Marshall Field's, Saks' and Bonwit's, and vacationed at Hilton Head, La Costa and Scottsdale. Respondent stated that two of the children had had extraordinary medical expenses in the last few years.
Concerning the Furst & Furst stock, petitioner testified that her father gave her the stock as a gift in 1961. She stated that she received $24,000 in dividends from Furst & Furst in 1981, and $8,000 in 1982. On cross-examination, petitioner admitted that when she was deposed, she stated that she had purchased the stock from her father using "bank books" from the American National Bank. Petitioner also was questioned at length concerning withdrawals from the marital accounts in the amount of $60,000 and withdrawals from the trust accounts of the children during the period from filing of the petition for dissolution until the trial. On redirect, petitioner explained the difference between her trial and deposition testimony as resulting from a conversation with her father shortly after the deposition.
Petitioner's father, Louis Lewis, testified that in 1961 he gave 2,000 shares of Furst & Furst stock to his daughter and a like amount to his then 15-year-old son. He stated that he was surprised to hear that his daughter had testified differently in her deposition. Lewis testified that as chairman of Furst & Furst, he knew that the 107,000 outstanding shares were owned by 16 shareholders, and that a block of 15,000 shares had recently been sold at $13 per share. In addition, he produced original promissory notes in the amount of $60,000 which he said represented recent loans to his daughter.
During cross-examination, Lewis admitted that he filed Federal gift tax returns for the years 1956, 1960 and 1973 through 1979, but he did not file a gift tax return in 1961. He admitted that the recent seller of Furst & Furst stock, a former employee of the corporation, had been paid on a lower basis than was provided in the repurchase agreement, but he explained that exercise of the agreement was optional with the company. He denied that the seller had been forced from employment. Lewis stated that prior to the recent loans, he "gave" his daughter whatever she needed.
Each party called an expert to value the disputed interest in Furst & Furst; both experts testified to the book value of the corporation. Respondent's expert, a certified public accountant, related three methods for the valuation of a closely-held corporation. He opined that the "discounted good will" method, recommended by the American Institute of Certified Public Accountants, was the most accurate. This method would yield a market value of $26.48 per share. The second method, based on the repurchase agreement, would yield a value of $44.61 per share, and the third, based on capitalization of earnings, $12.64 per share.
Petitioner's expert, a business appraiser, testified that direct appraisal of the minority interest in the company, as presented by the voting trust agreement, was the best method of valuation. He stated that his appraisal accounted for three factors: the recent transaction of a comparable block of shares, the book value reduced by a factor acceptable to the Internal Revenue Service, and the dividend capacity of the stock. Independently, these factors generated values of $13, $12.36 and $15 per share, respectively. According to petitioner's expert, the average of these figures represented an accurate value for the stock at $13.45 per share.
Petitioner was recalled to the stand to testify that during the trial, she had found bank records in the crawl space of the Lincolnwood residence. The records consisted of partial check registers for accounts at American National Bank, Bank of Lincolnwood and the Northern Trust covering limited periods in the years 1960 through 1962. She stated that her review of the records revealed no checks written to Louis Lewis or Furst & Furst.
The trial court made an explicit finding that the testimony of petitioner and her father was impeached and was not believed. The court found respondent's testimony to be believable. The trial court determined that 14,373 shares of stock in Furst & Furst were marital property, and valued the stock at $19.31 per share.
The trial court set apart non-marital stock worth $84,453 to petitioner, and it assigned to respondent his non-marital trust paying $34,000 annually. Account balances held by petitioner totaled $17,116 and those of respondent, $54,200; these accounts were awarded each to its holder, but the extent to which the accounts were or were not included in the $119,000 figure representing marital accounts at the time of petition does not appear. The trial court stated that respondent would be responsible for $16,500 in debts incurred by him, and that petitioner would be responsible for the "alleged" indebtedness to Louis Lewis.
The apportionment of marital property may be summarized as follows:
Property Value Furst & Furst stock ($277,000 less $75,000 payment to respondent) ...