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03/29/88 Suzanne S. Head, v. Henry B. Head

March 29, 1988

SUZANNE S. HEAD, PETITIONER-APPELLEE

v.

HENRY B. HEAD, RESPONDENT-APPELLANT



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SECOND DIVISION

523 N.E.2d 17, 168 Ill. App. 3d 697, 119 Ill. Dec. 549 1988.IL.444

Appeal from the Circuit Court of Cook County; the Hon. Jill K. McNulty, Judge, presiding.

APPELLATE Judges:

JUSTICE BILANDIC delivered the opinion of the court. STAMOS and CAMPBELL, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE BILANDIC

Petitioner, Suzanne S. Head (hereafter the wife) and respondent Henry B. Head (hereinafter the husband) were married in Chicago, Illinois, on April 15, 1961. The husband was a medical resident and the wife was a nurse. They have five children. When the judgment was entered, the husband was 51 years old, the wife 45 years old, and two of the children were minors. The husband is a physician specializing in internal medicine with a subspecialty of gastroenterology. The wife was a part-time real estate agent and presently a graduate student pursuing an advanced business degree.

It is not necessary to burden this opinion with a detailed list of total marital assets and the trial court's allocation. The husband challenges the propriety of the valuation placed on certain assets and what he considers inequitable burdens assigned to him.

A critical dispute arose over the value of the husband's interest in a professional corporation known as Cummins, Head & Khoury, Ltd., which he used for his medical practice. At the time of trial, the husband's annual income from this professional corporation was approximately $160,000. The wife's average annual real estate brokerage income over the last 10 years amounted to $12,000. I

The judgment provided that the "Husband is awarded his interest in the professional service corporation . . . constituting his medical practice which is valued at $175,000." It finds that the wife's experts determined the value to be $515,000 "using a capitalization earnings" method and that "the court is unable to accept Wife's valuation." The court also found that the professional corporation "generated revenues considerably greater than the average earned by internists in similar urban areas" due to the "skills and professional reputations of the doctors" and to a considerable degree, due to the husband's "special training and skill in the sub-specialty of gastroenterology." That portion of the judgment then concludes that "the reasonable value of this asset is $175,000."

The husband's expert fixed the value of his interest in the professional corporation at $58,000, which is based on the value of the tangible assets. Both parties agree that there was no other evidence presented regarding the value of the tangible assets. Therefore, the trial court could not increase the $58,000 value to $175,000 based on a higher value of the tangible assets.

To support the determination of the $175,000 value, the trial court added $117,000 to the husband's $58,000 valuation. By doing so, the court considered the stream of future income and the greater than average revenues earned by the corporation. In In re Marriage of Courtright (1987), 155 Ill. App. 3d 55, 507 N.E.2d 891, and In re Marriage of Wilder (1983), 122 Ill. App. 3d 338, 461 N.E.2d 447, we held that the value of the tangible assets is a proper basis for valuation of a medical practice.

Both cases also held that section 503(d) of the Illinois Marriage and Dissolution of Marriage Act (hereinafter the Act) requires the court, among other things, to consider the sources of income and earning power of the spouses in apportioning the total marital assets between the parties. (Ill. Rev. Stat. 1985, ch. 40, par. 503(d).) This does not justify the use of income twice on the same asset, namely, as a basis for its individual value and again in the apportionment of the total assets.

The legislature also provided for an award of maintenance under section 504 based on the future earning capacity of the parties. (Ill. Rev. Stat. 1985, ch. 40, par. 504.) Based on the present and future disparity of earnings, the court also awarded the wife $216,000 as maintenance in gross to be paid over six years under certain conditions.

The wife contends that the value fixed by the trial court's determination is correct. Since her husband's expert fixed the value at $58,000 and her experts testified to a value of $515,000, the court's value of $175,000 is within the "range of value" and must be affirmed. In support of her argument, she relies on In re Marriage of Melnick (1984), 127 Ill. App. 3d 102, 468 N.E.2d 490, and In re Marriage of Weinberg (1984), 125 Ill. App. 3d 904, 466 N.E.2d 925, appeal denied (1984), 101 Ill. 2d 578. These cases involve conflicting testimony of the value of existing ...


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