APPELLATE COURT OF ILLINOIS, SECOND DISTRICT
LOWELL RYMAN, Respondent-Appellee
527 N.E.2d 18, 172 Ill. App. 3d 599, 122 Ill. Dec. 646
Appeal from the Circuit Court of Kane County; the Hon. Melvin Dunn, Judge, presiding. 1988.IL.1058
PRESIDING JUSTICE LINDBERG delivered the opinion of the court. INGLIS and WOODWARD, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LINDBERG
On January 21, 1987, a judgment was entered as to Joyce A. Ryman (the Wife) and Lowell Edward Ryman (the Husband) in the circuit court of Kane County, dissolving their marriage of 25 years. Following a hearing on the Wife's post-trial motion, which was denied in part and granted in part, the trial court on June 22, 1987, adopted additional findings and amended the judgment of dissolution in accordance with its rulings on the Wife's post-trial motion. The enforcement of the trial court's judgment was stayed pending appeal. The Wife appeals from the judgment of dissolution entered January 21, 1987, as modified on June 22, 1987.
On appeal, the Wife claims that the trial court erred in the following ways: (1) in failing to reimburse the marital estate for its contributions to the non-marital life insurance policies of the Husband; (2) in improperly charging the expenditure of marital assets for a car and a vacation to the Wife and failing to distribute the marital assets in just proportions pursuant to section 503 of the Illinois Marriage and Dissolution of Marriage Act (the Act) (Ill. Rev. Stat. 1985, ch. 40, par. 503); (3) in failing to properly consider the relevant factors under section 504 of the Act (Ill. Rev. Stat. 1985, ch. 40, par. 504) and thereby awarding insufficient maintenance; (4) in failing to award the Wife a portion or all of her attorney fees; and (5) that the trial court was prejudiced against the Wife.
At the time the judgment of dissolution was entered, the Wife was 43 years old, and the Husband was 45 years old. The parties in the course of their marriage had two children; Rene, 21, was employed and living at home, and Jeffrey, 17, was a senior in high school and living at home.
The record shows that the Husband has been employed as a technician at WGN Studios for approximately 20 years. The Husband's gross wages for the year 1984 and 1985 were $53,500 and $54,500 respectively. It was established at trial that the Husband was getting a retroactive pay increase for 1986 but the amount of the raise had not yet been determined. The Wife has a high school education and made a homemaker's contribution to the marriage. The Husband testified that he did not want his Wife to work unless she wanted to. The Wife worked part time in 1978 as a receptionist in a real estate office. The Wife worked part time as a receptionist in a doctor's office during 1984 and 1985 at approximately $7 per hour. The Wife was employed in June 1986 full time at $6 per hour for AT&T doing clerical work as a temporary replacement for women on pregnancy leave. This job was to terminate at the end of December 1986. The tax returns for 1984 and 1985 show the Wife earned gross wages in the amount of $1,900 and $5,400, respectively. The Wife testified to having problems with her back. However, the evidence deposition of the Wife's doctor indicates no disability and states she is capable of full employment.
The Husband filed an affidavit of monthly expenses in the approximate amount of $1,700. The Wife had filed an affidavit of monthly expenses in March 1986 in seeking temporary support; however, the trial court refused to consider this affidavit at trial because it was based on a time when the Husband was present in the household. However, this did not prevent the trial court from awarding the Wife temporary support and maintenance of $350 per week plus utilities based on that same affidavit when the Husband left the marital home in March 1986.
The Husband had non-marital property consisting of the three life insurance policies with a total cash surrender value of $5,690 and a small inheritance of $1,000. The Wife had non-marital property represented by an inheritance in the amount of $38,640 at the time of trial. Prior to trial, the Wife expended $12,683 of her inheritance represented by approximately $4,000 she spent on doctor and attorney fees and approximately $8,000 which she gave to the daughter Rene. The marital property in existence at trial and available for distribution consisted of the following: (1) life insurance policy valued at $922; (2) the Husband's IRA valued at $2,000; (3) the Husband's employment pension valued at $3,857; (4) the Tribune employees' credit union account (savings account) valued at $4,248; (5) shares of stock valued at $480; (6) a savings account at Home Federal Savings in the amount of $1,622; (7) and two silver bars with a total value of $140. Additionally, the trial court specifically valued a washing machine, television set and tractor engine block purchased by the Husband with marital funds at $700, $700 and $500, respectively. The only other significant marital asset was the marital residence valued at $127,000. The outstanding mortgage was $16,750. The trial court found the selling costs to be $12,700. Subtracting the outstanding mortgage and selling costs, the marital residence had a cash value of $97,550 at the time of judgment. The trial court awarded both spouses their separate property and their respective vehicles. The trial court awarded the Wife one-half the marital savings ($2,935) and the two silver bars ($140) for a total of $3,075. The Husband received the rest of the marital property, except for the marital residence, with a total value of $12,094. The residence was to be sold when Jeffrey finished high school, with the Wife to receive one-half the proceeds plus $10,000 from the Husband's half of the proceeds. At the time of judgment this would give the Wife a $58,775 interest in the proceeds upon sale and the Husband a $38,775 interest in the proceeds of the sale. (For a list of the property and its distribution, see Appendix.) The court ordered the Wife to pay the 1985 real estate taxes and all future real estate taxes as they became due. The custody of the minor son Jeffrey was given to the Wife. The trial court order provided for child support equal to 20% of the Husband's net pay until the minor finished high school, which was to be after the minor's 18th birthday. The court reserved its jurisdiction to determine the issue of funding Jeffrey's college education. The court ordered the Husband to pay $300 per month maintenance to the Wife for the first year and $150 per month for the second year. The court made the maintenance award nonmodifiable. Each party was to pay his or her own attorney fees. I. DISTRIBUTION OF MARITAL PROPERTY
On appeal, the Wife contends that the trial court's distribution of the marital property pursuant to section 503 of the Act (Ill. Rev. Stat. 1985, ch. 40, par. 503) was based on erroneous findings; that the trial court failed to properly consider the factors listed under section 503 of the Act, and that the resulting distribution of the marital property was an abuse of discretion. In distributing the parties' property under section 503, the trial court must first make certain findings in order to classify each item of property as either "marital" or "nonmarital." (In re Marriage of Thornton (1980), 89 Ill. App. 3d 1078, 412 N.E.2d 1336.) Second the trial court must determine whether either party has made a showing by clear and convincing evidence that one estate of property has contributed to another, thus entitling the contributing estate to reimbursement under section 503(c)(2) of the Act (Ill. Rev. Stat. 1985, ch. 40, par. 503(c)(2)). Third, the trial court must assign each spouse his or her non-marital property, and then considering all relevant factors including those listed in section 503(d) of the Act, the trial court "shall divide the marital property . . . in just proportions." Ill. Rev. Stat. 1985, ch. 40, par. 503(d); Thornton, 89 Ill. App. 3d 1078, 412 N.E.2d 1336.
First we address certain findings and orders of the trial court, which the Wife argues are not supported by the record. Specifically, the Wife contends the trial court abused its discretion: (1) in failing to reimburse the marital estate for its contributions to the maintenance of the Husband's three non-marital life insurance policies; (2) in allocating to the Wife's share of marital property, $11,500 or marital savings representing $8,000 spent on a 1981 Cutlass in January 1983 and $3,500 spent on a European vacation with the minor son in 1984; (3) in allocating to the Wife a $2,600 debt representing the, as yet, unpaid 1985 real estate taxes which were due and payable in 1986. On review, the findings of a trial court in a marriage dissolution proceeding will not be set aside unless they are clearly against the manifest weight of the evidence. Fields v. Fields (1977), 54 Ill. App. 3d 400, 369 N.E.2d 586.
A. HUSBAND'S THREE NON-MARITAL LIFE INSURANCE POLICIES
The Wife argues on appeal that the trial court erred in failing to reimburse the marital estate for its contributions to three nonmarital life insurance policies of the Husband. The Wife argues that the trial court, in its judgment of dissolution on January 21, 1987, found the marital estate entitled to reimbursement but erroneously concluded that there was no evidence offered to show the amount of reimbursement. When the Wife raised this issue in her post-trial motion, the trial court disregarded the Wife's argument on valuation of reimbursement and denied reimbursement to the marital estate on the theory that the marital estate had already received substantial benefits by being protected in the event of the Husband's death, and because the court was requiring the Husband to maintain the insurance for the benefit of the Wife while the support obligations of the Husband continued. The Wife contends that the trial court's ruling was error in that: (1) evidence sufficient to determine reimbursement was introduced, and (2) the benefits received due to the coverage in the event of the Husband's death is not "property" within the meaning of section 503 of the Act (Ill. Rev. Stat. 1985, ch. 40, par. 503). We agree. The relevant statute provides:
"When one estate of property makes a contribution to another estate of property, . . . the contributing estate shall be reimbursed from the estate receiving the contribution notwithstanding any transmutation; provided, that no such reimbursement shall be made with respect to a contribution which is not retraceable by clear and convincing evidence . . .." (Emphasis added.) (Ill. Rev. Stat. 1985, ch. 40, par. 503(c)(2).)
The value of an insurance policy may be determined from its cash surrender value less any amounts borrowed against the insurance policy's cash surrender value. (In re Marriage of Mullins (1984), 121 Ill. App. 3d 86, 458 N.E.2d 1360 (trial court properly assigned a zero value to a insurance policy with a cash surrender value of $14,000 where $14,000 had been borrowed against the cash surrender value of the insurance policy).) In valuing an insurance policy as "property" under section 503, the health and life insurance benefits enjoyed by the marital estate are not included in the valuation process as "property." In re Marriage of Fairchild (1982), 110 Ill. App. 3d 470, 442 N.E.2d 557.
In the instant case, the three life insurance policies at issue were found to be non-marital property of the Husband, and that finding is not before us on review. The trial court found the cash surrender value of the Husband's three policies to be $5,690. It was established by clear and convincing evidence that the marital estate paid $4,492.50 to maintain these policies of the Husband. The trial court went as far as to find that the marital estate would be entitled to contribution. However, when the Wife, at the hearing on her post-trial motion, showed that there was clear and convincing evidence as to the amounts of contribution, the trial court offset the marital estate's right to reimbursement with the benefits of the coverage received by the marital estate and refused to reimburse the marital estate. The trial court abused its discretion when it denied reimbursement to the marital estate. First, section 503(c)(2) of the Act mandates reimbursement to the contributing estate for contributions retraceable by clear and convincing evidence. (Ill. Rev. Stat. 1985, ch. 40, par. 503(c)(2).) Section 503(c)(2) of the Act further provides:
" The court may provide for reimbursement out of the marital property to be divided or by imposing a lien against the nonmarital property which received the contribution." (Emphasis added.) (Ill. Rev. Stat. 1985, ch. 40, par. 503(c)(2).)
The trial court erred when it attempted to offset the marital estate's right to reimbursement with the benefits of coverage received by the marital estate because such benefits are not "marital property" as that term is used in section 503. (In re Marriage of Fairchild (1982), 110 Ill. App. 3d 470, 442 N.E.2d 557.) The trial court's refusal to reimburse the marital estate was an abuse of discretion. In re Marriage of Fryer (1980), 88 Ill. App. 3d 454, 410 N.E.2d 596 (if trial court states positively that it is disregarding one or all of the factors set forth in section 503 of the Act, it may be said that an abuse of discretion has occurred).
As will be discussed later in this opinion, we find it necessary to remand this cause to the trial court. On remand, the amount of reimbursement to which the marital estate is entitled may be determined by multiplying the cash surrender value of the policies by the ratio of marital contributions to the total amount of premiums paid. We note that the record indicates that one of these policies may have been encumbered with a loan used for the re-siding of the marital home. The trial court, if the Husband so desires, should receive additional evidence on this issue in determining the amount of reimbursement to the marital estate.
The trial court, as part of its distribution of the marital assets, credited to the Wife's share $11,500, representing the amount spent from a marital savings account for a car and a trip to Europe with the minor son, Jeffrey. In effect, the trial court implicitly found that the Wife had dissipated marital assets. Dissipation has been defined as "the use of marital property for the sole benefit of one of the spouses for a purpose unrelated to the marriage at the time that the marriage is undergoing an irreconcilable breakdown." In re Marriage of Smith (1984), 128 Ill. App. 3d 1017, 1019, 471 N.E.2d 1008, 1011.
The record shows that marital difficulties began sometime in 1983, and that in October 1983 the Husband began to give the Wife $400 a week to cover the family's expenses. Prior to this time, the Husband had given his paycheck to the Wife, who deposited it in a marital account and paid the family expenses. The Husband also opened his own checking and savings account in late 1983 or early 1984. The Wife filed her petition for dissolution of marriage on July 13, 1984. The record shows that approximately two month's prior to filing for divorce, the Wife used $3,500 in marital savings for her trip. The testimony of the Wife on direct examination was that initially the Husband agreed with her plans. However, on cross-examination the Wife testified that the Husband changed his mind and expressed his opposition within "a couple of hours." Based on the record, the trial court's implicit finding that the Wife dissipated $3,500 of marital assets on her European trip and the trial court's allowance for its finding in distributing the marital property was not an abuse of discretion. Smith, 128 Ill. App. 3d 1017, 471 N.E.2d 1008; Ill. Rev. Stat. 1985, ch. 40, par. 503(d)(1).
However, the trial court's implicit finding that the Wife dissipated marital assets in the purchase of a car was against the manifest weight of the evidence, and the trial court's reliance on that finding in its allocation of marital property was an abuse of discretion. (In re Marriage of Fryer (1980), 88 Ill. App. 3d 454, 410 N.E.2d 596.) The record shows that the Husband purchased a 1982 Toyota pickup truck in late 1982. This purchase was financed with a loan from the Husband's credit union. The truck loan had been paid off at the time of trial (apparently with marital funds). A used 1981 Cutlass was purchased with $8,000 of marital savings in January of 1983 for the Wife's use. The Husband only testified that the 1981 Cutlass was purchased for $8,000. The Wife testified that the Husband was an active participant in the purchase of the car. She testified that they decided to pay cash because they did not want to take out another loan at a high interest rate. This testimony was uncontradicted by the Husband and the only evidence on the issue. In light of the fact that the Husband was an active participant in the purchase of the 1981 Cutlass, the trial court's implicit finding that the Wife dissipated marital assets was against the manifest weight of the evidence. It was an abuse of discretion for the trial court to charge the Wife's share of the marital property with $8,000 in dissipation of assets for the purchase of the 1981 Cutlass.
D. 1985 REAL ESTATE TAXES
The trial court's distribution of property included an order for the Wife to pay the 1985 real estate taxes which became due and payable in 1986. The record shows that the Wife filed an affidavit of monthly living expenses when she sought temporary support in March 1986 after the Husband moved out. Included in this affidavit as an item was approximately $217 per month for the real estate taxes on the marital home. The trial court granted the Wife temporary support in the amount of $350 per week based on this affidavit. In spite of receiving this temporary support, the Wife failed to make payments on the 1985 real estate taxes as they became due in 1986. The record does not show any reason for the failure of the Wife to pay the taxes as they became due, nor does the Wife explain this failure in her brief. She was residing in the residence and receiving funds from the Husband due to a court order which included an amount requested by her for the payment of the real estate taxes. The Wife's failure to pay the real estate taxes could be properly characterized as dissipation of marital assets. (See In re Marriage of Aslaksen (1986), 148 Ill. App. 3d 784, 500 N.E.2d 91 (husband dissipated assets where he failed to make ...