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In Re Marriage of Banach

OPINION FILED JANUARY 17, 1986.

IN RE MARRIAGE OF MARIA BANACH, PETITIONER-APPELLANT, AND JOHN BANACH, RESPONDENT-APPELLEE.


Appeal from the Circuit Court of Du Page County; the Hon. Robert D. McLaren, Judge, presiding.

JUSTICE SCHNAKE DELIVERED THE OPINION OF THE COURT:

The petitioner, Maria Banach, and the respondent, John Banach, were married in Poland on January 20, 1957. The parties came to the United States in February of 1966, and petitioner filed this action for a dissolution of marriage in the circuit court of Du Page County on December 4, 1980. After a contested trial on the issue of property division, the trial court entered a judgment of dissolution on June 27, 1984, and petitioner filed this appeal on July 25, 1984. Respondent filed a cross-appeal on August 27, 1984, which was dismissed for want of jurisdiction. On appeal, petitioner argues: (1) that the trial court did not have the authority to grant the parties successive options to buy out the other's interest in the marital business; (2) that the trial court's finding that certain alleged debts were not marital liabilities was against the manifest weight of the evidence; (3) that the trial court's division of marital property was an abuse of discretion; and (4) that the trial court erred in denying petitioner maintenance prior to making a final distribution of the marital property.

The marital assets of the parties consisted primarily of certain improved real estate located at 408 North Fulton, Villa Park, a vacant lot located in Florida, the Europa Restaurant located at 160 West North Avenue, Villa Park, and their adjoining marital home located at 824 North Yale, Villa Park. In addition to this real estate, the parties owned two motor vehicles and respondent held certain pension rights with International Harvester Company. Further, petitioner presented evidence of $84,600 in alleged marital debts consisting of loans and back wages owed to several relatives and close friends.

The parties stipulated: (1) that the real estate located at 408 North Fulton would be sold and the proceeds divided equally to pay their respective attorney fees; (2) that the vacant Florida property, valued at approximately $5,000, would be sold and the proceeds divided equally; and (3) that respondent would be awarded all right, title and interest in his pension, valued at $6,000. Further, the court found that the parties should keep the automobiles they were presently driving and that each party should pay one-half of the $10,000 marital debt the court found was owed to petitioner's brother, Frank Balwierz.

The primary dispute between the parties involved the Europa Restaurant and the adjoining marital home. The court found that it was in the best interest of both parties if the two properties were treated together and that both parties were entitled to one-half of the value of the properties, which the court found to be $465,000. In order to liquidate the properties the court granted each party an option to purchase the other spouse's interest for $232,500. Petitioner was given 30 days in which to exercise her option and purchase respondent's one-half interest. If petitioner failed to exercise her option, respondent would have 30 days to exercise his option. If neither party exercised his or her option, the properties would be listed with a real estate broker for six months at a listing price of $465,000. If the properties remained unsold after six months, they would be sold at public auction and the proceeds divided equally. On July 18, 1984, the judgment was amended to lower the option price to $127,194.37 in light of the two existing mortgages on the restaurant.

Beyond the property acquired, three children were born as a result of the marriage. Christine and Martha were emancipated, married adults at the time of trial, while Violet was 12 years of age. The parties stipulated that it was in Violet's best interest that petitioner retain custody with liberal visitation rights to respondent. The court further awarded petitioner $53 per week in child support but denied her maintenance.

• 1 Petitioner's first contention is that the trial court lacked authority to grant each party an option to purchase the other spouse's interest in the restaurant and marital home. Petitioner argues that the court's ability to distribute marital property is strictly prescribed by statute and that section 503 of the Illinois Marriage and Dissolution of Marriage Act (IMDMA) (Ill. Rev. Stat. 1983, ch. 40, par. 503), allows only for the division of property by its subsequent sale.

Contrary to petitioner's argument, the power "to divide the marital property" given the trial court by section 503(d) includes the powers necessary to render effective the power to divide. (In re Marriage of Kueber (Mo. App. 1980), 599 S.W.2d 259.) Courts have generally found it unwise to divide a business interest in kind because it would necessitate an ongoing business association between the parties. (In re Marriage of Sales (1982), 106 Ill. App.3d 378; In re Marriage of Hellwig (1981), 100 Ill. App.3d 452; In re Marriage of McMahon (1980), 82 Ill. App.3d 1126.) Therefore, where property, such as a business, is not susceptible to division in kind or such division would be inequitable, the court may, in its discretion, award the property to one spouse, subject to an obligation to pay the nonacquiring spouse for the interest lost. (In re Marriage of Rossi (1983), 113 Ill. App.3d 55; In re Marriage of Sales (1982), 106 Ill. App.3d 378; In re Marriage of Hellwig (1981), 100 Ill. App.3d 452; In re Marriage of Leon (1980), 80 Ill. App.3d 383; In re Marriage of Lee (1979), 78 Ill. App.3d 1123.) Such repayment may be made by offsetting other marital property or by payment in cash, either in gross or installments. In re Marriage of Hellwig (1981), 100 Ill. App.3d 452; In re Marriage of Lee (1979), 78 Ill. App.3d 1123.

If the trial court has the authority to award the restaurant to a specific party, subject to a cash repayment, we fail to see why the court would not also have the authority to award the restaurant to either party, subject to a cash repayment, by the use of successive options. Such a distribution is well suited to dissolutions such as this where both parties request the business but their financial ability to make the cash repayment is uncertain. See also In re Marriage of Simmons (1980), 87 Ill. App.3d 651 (trial court abused its discretion in failing to give respondent an option of purchasing petitioner's half interest in their real estate so as to be able to end the animosity which led to the dissolution of marriage).

• 2 Petitioner is correct, however, in her contention that the trial court erred in determining the amount of the cash repayment. In paragraph 14 of its judgment the court found that both parties were entitled to one-half of the value of the properties, that the properties had a "full fair cash market value" of $465,000, that the restaurant had two outstanding mortgages totaling $210,611.26, and that the house had an outstanding mortgage of $52,925. In its July 18, 1984, amended judgment, the trial court set the cash repayment price at $127,194.37. In reaching this amount, the trial court deducted the restaurant's two mortgages from the fair market value of the properties but failed to deduct the house's $52,925.60 mortgage. When all three mortgages are deducted, the parties are left with $201,463.14 of equity in the properties. Since the court held that each party was entitled to one-half of the value of the restaurant and house, the correct cash repayment price should have been $100,731.57.

Appellant also argued in her brief that the trial court did not have the authority under section 503 to impose the terms and conditions of the cash repayment options. Specifically, she objected to the non-competition clause in the cash repayment option which prohibited the nonpurchaser from engaging in the dispensing of food or liquor within 20 miles of the Europa Restaurant for a period of three years. At oral argument, however, petitioner expressly withdrew this issue from our consideration of this appeal and we, therefore, do not decide it.

• 3 Petitioner's second argument is that the trial court erred in finding that her alleged debts to close friends and family members were not marital debts, with the exception of a $10,000 debt the trial court found was owing to her brother, Frank Balwierz. The validity of these alleged debts, however, was contested by respondent.

The first two alleged debts were $30,000 in loans from Frank Balwierz, petitioner's brother, and $5,014 in loans from Stella Kurek, petitioner's close friend for 16 years. The loans were allegedly made, at least in part, by check, but petitioner failed to produce any of the checks in court. Petitioner did produce promissory notes to both Balwierz and Kurek, which were allegedly signed by respondent after the time petitioner filed this action for dissolution. Respondent denied having signed the notes and produced expert testimony that his alleged signature was a forgery. Based upon this evidence, we cannot say that the court's finding that respondent's signature was a forgery and that the alleged loans were not marital debts was against the manifest weight of the evidence.

The third alleged debt was $28,000 in back wages allegedly owed to Agata Worytko, petitioner's sister, who worked as a cook at the Europa Restaurant. Agata testified that she had a verbal agreement with petitioner that her salary at the restaurant would be $14,000 a year plus room and board, and that she had not been paid between August of 1981 and August of 1983 because the restaurant was having financial difficulties. The trial court, however, sustained respondent's objection to Agata's testimony on the basis that Agata's claim was barred as a marital debt by the Statute of Frauds in that it was a verbal contract not to be performed within one year. We find that we need not address the issue of Agata's back wages. In her brief, petitioner merely reviews the evidence and fails to make any argument that the ...


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