Appeal from the Circuit Court of Cook County; the Hon. Allen
F. Rosin, Judge, presiding.
PRESIDING JUSTICE BUCKLEY DELIVERED THE OPINION OF THE COURT:
On October 26, 1978, a bifurcated judgment was entered dissolving the marriage of plaintiff Harry Brooks and defendant Maureen Brooks, reserving questions of maintenance and property division. More than five years later, the court entered a supplemental judgment disposing of the parties' marital property and awarding defendant maintenance. Plaintiff's motion for reconsideration of the supplemental judgment was denied by the court. Plaintiff appeals the supplemental judgment and the denial of his motion or reconsideration. For the following reasons, we affirm.
The parties were married on July 15, 1950, and had three children during the marriage, all of whom were emancipated at the time the judgment for dissolution was entered. In 1965, after 15 years of marriage, the parties, without court order, ceased living together as husband and wife. On December 2, 1978, approximately two months after the entry of the dissolution judgment, Harry married Elaine Coopersmith. In June 1983, Elaine was impleaded as an additional counterdefendant in these proceedings.
The matters of property division and maintenance proceeded to trial in November 1982. At that time, Maureen was 65 years old and living in an apartment in suburban Palatine. On the date of dissolution she had been employed as a bookkeeper/secretary at Arlington Steel in Arlington Heights. By 1980, her annual salary at Arlington Steel had increased to approximately $18,000. She remained employed until 1980, when she suffered the first of three strokes.
Dr. Richard Treanor, Maureen's treating physician, testified at length regarding Maureen's health. He stated that as a result of her strokes, Maureen suffered facial paralysis and lost part of her vision on the right side of her visual field. Maureen additionally suffers from diabetes and high blood pressure. The effects of her strokes, diabetes and high blood pressure include dizziness, confusion, memory loss and poor vision. He opined that the diabetes and poor vision were permanent conditions. Her ability to function on a daily basis is impaired. She cannot drive or read, and her required insulin could cause short term episodes of paralysis, lasting a few minutes or as much as 24 hours, and could cause another stroke. Dr. Treanor told Maureen she could not work.
Following her strokes, Maureen received $380 per month in social security payments and $195 per week as temporary support from Harry. She has no other income or savings. An affidavit prepared by the parties' daughter listed Maureen's monthly expenses as $1,618, and her personal debts as $9,366. Maureen testified she could not afford to have the home nursing service recommended by her doctor.
Harry was 58 years old at the time of the hearing on the property division. He was founder and president of Excellent Builders, Inc., and president of Baythorn Development, Inc., and Tampa Chicken, Inc. Excellent Builders was formed in 1966, Baythorn in 1978, and Tampa Chicken in 1980. Harry's testimony indicated he only received an income from Excellent Builders. He stated that as president of Excellent he had sole control over the amount of his salary, which currently was $900 per week as of July 6, 1983. Harry stated he earned $156,000 in 1976, $123,000 in 1977 and $87,000 in 1978. As president of Excellent Builders, he also received medical and life insurance, membership in a country club, entertainment expenses, an American Express account and a Mercedes 450 SL automobile.
Harry testified he owns the North Kedzie Avenue building which houses Excellent Builders. He purchased the building in August 1977 for $95,000, with a mortgage of $88,000. He leases the building to Excellent Builders for $1,125 per month.
Harry also owned a number of residential properties, including Units 20E and 22A at 3900 North Lake Shore Drive in Chicago. In January 1978, Harry purchased Unit 20E for $39,000, providing a down payment of approximately $8,000. Five months later he assigned his interest in the unit to the parties' son and daughter-in-law, notwithstanding a court order preventing the parties from disposing of any assets. In August 1981, the son was divorced, and he and Harry became owners of Unit 20E, each with a 50% beneficial interest in the land trust holding title to the unit. The unit was sold in June 1983.
Unit 22A was purchased for $62,500 in January 1978. Harry testified that he and Elaine each put $6,000 down on the unit and that they co-signed a mortgage for the remainder. The unit was sold in July 1981 for $120,000. The proceeds from the sale were used for the down payment on a $116,000 townhouse in Highland Park. Harry and Elaine currently reside in the townhouse.
Additionally, in 1979 Harry and Elaine purchased a Florida condominium for $98,000. Title was transferred in 1981 to Elaine alone. In August 1982, the condominium was sold for $135,000.
William Coscioni, a certified public accountant, testified on Maureen's behalf concerning Harry's finances. Coscioni examined income tax returns, loan documents, stock transactions and other records for Excellent Builders from the years 1977 through 1981. His examination also included bank accounts, financial statements and the individual tax returns of Harry and Elaine for the years 1976 to 1982. Based on his examination, Coscioni testified that Harry's "real" or disposable income was as follows: $102,869 in 1978; $167,272 in 1979; $82,533 in 1980; $101,222 in 1981; and $91,300 in 1982.
Coscioni also stated that Harry's actual salary from Excellent Builders dropped from $128,000 in 1977 to an estimated $55,000 in 1982. However, concurrent with Harry's salary decline was a corresponding increase in loans to him from Excellent. As a result, Harry's "real income" actually remained fairly consistent from 1976 through 1981. The only exception was in 1979, when Harry's real income was $167,272. In that year, Harry received Las Vegas gambling winnings of $50,000, an automobile valued at $7,000 as a prize, a tax refund of $26,000 and a $10,000 increase in his loan account from Excellent Builders. Harry did not report his gambling winnings on his tax return, nor pay any tax on the money.
Coscioni further testified that the value of Excellent Builders on the date of dissolution was $259,000 and that its current value is $359,000. His valuation was based on several factors, including Harry's personal financial statement dated August 15, 1978, admitted into evidence by stipulation. The financial statement had been submitted by Harry to Continental Bank to secure a loan.
Coscioni also testified that Harry's assets as of October 31, 1982, totaled slightly more than $2,000,000. This calculation included the following: small amounts of cash, marketable securities worth $38,000, nonmarketable securities valued at $104,000, stock in Excellent Builders valued at $359,000, parcels of real estate in suburban Flossmoor (Baythorn Development), the Kedzie Avenue building housing Excellent Builders, the Highland Park townhouse, a condominium on Lake Shore Drive and personal property valued at approximately $25,000.
Coscioni found the following liabilities existing as of October 31, 1982: miscellaneous bills and accounts, stock market accounts of approximately $16,000, personal loans at Continental Bank of $115,000 and at Pioneer Bank of $33,000, loans relating to certain real estate including the Flossmoor properties with mortgages of $1,175,000, a first mortgage of $80,000 on the office building housing Excellent Builders, a first mortgage of $55,000 on the Highland Park condominium, and a first mortgage of $38,000 on the Lake Shore Drive condominium. Harry's total liabilities amounted to $1,500,000, with a resulting personal net worth in 1983 of approximately $500,000.
Testifying on Harry's behalf was Jay Colbert, a certified public accountant, who had worked for Harry since 1978. Colbert stated that because of the loan structure of Excellent Builders and Baythorn Development, and because of Harry's personal guarantees of that structure, Harry's financial condition was "very precarious." He testified that should the banks "call the loans," Harry and Excellent Builders "would be out of business." Moreover, if Excellent would be unable to cover the loans, in Colbert's opinion, the banks would seek relief from Harry, as guarantor. Colbert also testified that Baythorn Development was an "inert corporation * * *, not dissolved but not doing business" with no real assets.
Loan officers from three lending institutions testified at the hearing. Thomas Przyborski of Security Federal Savings & Loan testified that Baythorn Development was then $842,229 in default on four loans made to the company between September 1978 and July 1979, and that foreclosure proceedings had been initiated. However, Harry's witness, Jay Colbert, later testified that the Security Federal loan obligation had been extinguished by a deed in lieu of foreclosure. James Lucansky of the Associate's Financial Institute stated that four loans made to Baythorn Development and guaranteed by Harry as president of Baythorn were then in default. The outstanding amount of principal and interest was $1,556,000. Lucansky testified that the loans were secured by collateral and that no action had been taken to collect the funds. Finally, Cecelia Kurtzweil of Continental Bank testified that there was an outstanding balance of $409,142 on a $338,000 loan which was made to Excellent Builders in February 1980 and was guaranteed by Harry as president of Excellent. She also stated that a balance of $102,686 remained on a loan to an individual named Steven Jacobson which Harry took out in August 1978, and a balance of $21,047 remained on a loan Harry took out for himself in November 1977.
In November 1983, the trial court made its oral pronouncement of its findings as to property division and maintenance. Three months later, the court entered a written supplemental judgment directing that the marital assets be divided 50/50 between the parties and that this division be based on the value of the assets at the time of dissolution, which the court found to be $460,000. The court awarded Maureen $230,000 in lieu of any interest she had in any of the properties. The $230,000 was to be paid by Harry in annual installments over 17 years without any interest on the unpaid balance. The court further awarded Maureen $225 per week as ...