APPELLATE COURT OF ILLINOIS, FIFTH DISTRICT
Petitioner-Appellee and Cross-Appellant, and JONATHAN
EDWARD CHASE TATHAM, Respondent-Appellant and
527 N.E.2d 1351, 173 Ill. App. 3d 1072, 123 Ill. Dec. 576 1988.IL.1290
Appeal from the Circuit Court of Johnson County; the Hon. James R. Williamson, Judge, presiding.
JUSTICE LEWIS delivered the opinion of the court. KARNS and WELCH, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LEWIS
Jonathan Edward Chase Tatham (respondent) appeals from a judgment of the circuit court of Johnson County denying his post-trial motion and from the judgment dissolving his marriage to Jane Elizabeth Tatham (petitioner) entered on January 21, 1987. After consideration of respondent's post-trial motion filed on February 20, 1987, an amended judgment for dissolution was entered on April 13, 1987. Respondent appeals the amended judgment of dissolution as it pertains to the issues of the reimbursement of the marital estate for contributions from the nonmarital estate, of the award of a homemaker's contribution to petitioner, of the classification as marital property and valuation of certain items of personalty, and of the determination of the amount of child support to be paid by the respondent. Petitioner cross-appeals the judgment of dissolution with regards to the circuit court's denial of the award of maintenance and to the amount of petitioner's attorney fees that the circuit court ordered respondent to pay. We will not set out a statement of facts at this juncture, but delineate the pertinent facts as the issues are discussed.
The first issue respondent raises on appeal is that the circuit court erred when it ordered respondent to pay petitioner one-half of $65,600, the amount of the salary that respondent forwent soon after the parties' marriage in June 1977. He argues that respondent's personal efforts as farm manager on his father's farm were to non-owned property as opposed to non-marital property and therefore not subject to reimbursement to the marital estate. Alternatively, he contends that if the property was nonmarital, respondent's personal efforts were neither significant nor did his efforts result in substantial appreciation of the farm.
The evidence adduced at trial established that respondent's father, Arthur E. Tatham, purchased a 1,006-acre farm in Vienna, Johnson County, Illinois, in 1954. Although the farm was titled in respondent's father's name, respondent had lived on the farm since 1966. Respondent became manager of the farm in 1968 or 1969 and he continued in this employment after he and petitioner married. Respondent and petitioner were married on June 25, 1977, and they resided on the farm during the entire period of their marriage. Prior to the parties' marriage, respondent received a salary of $800 per month for his employment but shortly after their marriage, respondent elected not to receive this salary.
In December 1979, respondent's father established the Arthur E. Tatham trust (the trust). When the trust was created, Arthur Tatham transferred all of his assets into the trust, including the assignment of the title to the farm. Under the terms of the trust, Arthur Tatham was to be the sole beneficiary and the trustee of this revocable trust. However, upon his death, the remainder of the trust was to be divided equally between his three children, with a special provision that as part of his one-third share of the trust, if respondent was living 30 days after Arthur Tatham's death, respondent was to receive the farm. Upon Arthur Tatham's death, respondent and his two sisters were to become co-trustees of the trust if Arthur Tatham's wife were no longer living, with Jane Tatham Johnson to be acting trustee. Although Arthur Tatham made four amendments to the trust, at no time did he alter the provision regarding the farm, and thus this provision for the farm remained as stated in the original trust document at Arthur Tatham's death on September 5, 1985. Arthur Tatham's will provided that the residue of his estate, comprising the trust assets, was to be distributed in accordance with the provisions of the trust. A trustee's deed giving respondent title to the farm was executed on December 8, 1986, and was duly recorded on December 10, 1986, after the hearings regarding the division of marital property had been conducted but before the judgment of dissolution was entered.
In the judgment of dissolution entered on April 13, 1987, the circuit court determined that respondent had been receiving a salary of $800 per month as farm manager prior to the parties' marriage but that after the marriage, respondent voluntarily ceased to collect this salary. The circuit court held that had respondent continued to collect this salary, this salary would have been part of the marital estate. Therefore, the circuit court found that respondent's refusal to accept a salary was a contribution by the marital estate to non-marital property of the respondent for which the marital estate was entitled to reimbursement and that respondent's personal efforts were significant and resulted in substantial appreciation of the non-marital property. For those reasons, the circuit court ordered respondent to pay petitioner $32,800 (one-half of the amount of salary that would have been paid had respondent continued to collect this salary during the entire marriage).
Respondent contends that the circuit court erred in determining that respondent's personal efforts were a contribution of the marital estate to the non-marital estate. He argues that because title to the farm remained in the trust until December 1986, respondent's personal efforts can only be viewed as personal efforts to non-owned property as opposed to non-marital property and therefore outside the purview of the statute. We do not agree.
Respondent's reasoning is erroneous for several reasons. Section 503(b) of the Illinois Marriage and Dissolution of Marriage Act states:
"For purposes of distribution of property pursuant to this Section, all property acquired by either spouse after the marriage and before a judgment of dissolution of marriage or declaration of invalidity of marriage, including non-marital property transferred into some form of co-ownership between the spouses, is presumed to be marital property, regardless of whether title is held individually or by the spouses in some form of co-ownership such as joint tenancy, tenancy in common, tenancy by the entirety, or community property. The presumption of marital property is overcome by a showing that the property was acquired by a method listed in subsection (a) of this Section." (Ill. Rev. Stat. 1987, ch. 40, par. 503(b).)
From the language of the statute, for the purposes of distribution, consideration must be given to all property acquired by the parties of the marriage after the marriage and before the date of dissolution. In this case, the date of dissolution of the parties' marriage was April 13, 1987. If consideration is given to the transfer of title to the farm as indicative of when respondent acquired legal ownership of the farm, then the date of acquisition was December 8, 1986, before the date of dissolution. Thus the farm must be considered in the circuit court's distribution of property, either as marital property or as non-marital property, as it was owned by respondent at the date of dissolution. Next, we must determine if the farm was nonmarital property or marital property.
Under section 503(b), property acquired by the parties after a marriage and before the date of dissolution is presumed to be marital property. This presumption can be overcome by showing that the property was acquired in one of the methods set forth in section 503(a) of the Illinois Marriage and Dissolution of Marriage Act. (Ill. Rev. Stat. 1987, ch. 40, par. 503(a).) Section 503(a)(1) provides that the presumption that property acquired after the marriage is marital property is overcome by a showing that the property was acquired by gift, legacy or descent. (Ill. Rev. Stat. 1987, ch. 40, par. 503(a)(1).) Since the evidence in this case demonstrated that respondent's father's will directed that the residue of his estate be distributed in accordance with the provisions of the trust, and since the trust provided that respondent was to receive the legal ownership of the farm as part of his distributive share of the trust assets, respondent met the burden of overcoming the presumption that the farm was marital property. Therefore, the circuit court correctly categorized the farm as respondent's non-marital property at the date of dissolution. However, our analysis of the nature of respondent's interest in the farm cannot cease here.
Under the terms of Arthur Tatham's trust, respondent obtained a future interest in the farm at the time of the creation of the trust. The trust provided that Arthur Tatham enjoyed a life estate in the farm and that respondent was to receive the farm by remainder in fee simple upon Arthur Tatham's death with the proviso that respondent survive his father by 30 days. Thus respondent acquired a beneficial interest, and therefore a property right, in the farm on December 11, 1979, the date of the creation of the trust. The granting of respondent's beneficial interest in the farm through the trust was equivalent to a "gift" as that term appears in the statute, so the beneficial interest was respondent's non-marital property. Thus even if respondent had not had legal ownership of the farm at the date of dissolution, he had a beneficial interest in the farm, a sufficient interest in the property upon which to reimburse the marital estate for respondent's personal efforts contributed to that property. Under either analysis, the circuit court's determination that the farm was non-marital property and that respondent's personal efforts towards the non-marital property were a contribution by the marital estate was correct.
Respondent alternatively argues that even if the property was nonmarital, his personal efforts were neither significant nor resulted in a substantial appreciation of the farm as section 503(c) of the Illinois Marriage and Dissolution of Marriage Act (Ill. Rev. Stat. 1987, ch. 40, par. 503(c)) requires, and, therefore, the circuit court erred when it determined the marital estate was entitled to reimbursement for those efforts. Respondent supports his argument that his personal efforts were not significant by stating that there was no evidence in the record detailing the work performed by the respondent and by noting that the farm sustained losses for every year except one since 1979. To the contrary, there is adequate evidence in the record that respondent's personal efforts were significant.
Respondent testified that he was farm manager from 1968 or 1969 to the present. His duty as farm manager was to manage the entire farm. When he first became farm manager, the farm was used exclusively for the raising of cattle. Subsequently, respondent attempted to grow row crops. When the growing of crops proved unsuccessful, respondent sought loans available from the government to offset this failure in an attempt to keep the farm operating. Respondent returned to the raising of cattle when he determined that growing crops was not a profitable use of the farm. The work on the farm was by respondent's sole efforts as he had not hired anyone to work with him since 1979. Respondent also constructed a riding stable and arena on the farm in late 1977 and early 1978, and he rents these facilities to bring in additional income to the farm. These efforts of respondent can only be viewed as significant.
Respondent relies on In re Marriage of Morse (1986),143 Ill. App. 3d 849, 493 N.E.2d 1088, in support of his argument that the circuit court erred in finding his personal efforts significant. Morse can be distinguished factually from the instant case. In In re Marriage of Morse (143 Ill. App. 3d 849,493 N.E.2d 1088), the circuit court ordered respondent to reimburse petitioner for her personal efforts to respondent's non-marital insurance agency. In so ordering, the circuit court found that petitioner's personal efforts were both significant and resulted in substantial appreciation of the business. On appeal, this court concluded that petitioner's personal efforts did not rise to "significant effort" nor did her involvement lead to "substantial appreciation" of the insurance agency. In Morse, petitioner testified that she worked from one to three hours every day at the insurance agency. Additionally, she became a licensed insurance broker and sold two insurance policies. Her testimony was rebutted by respondent's witnesses. Petitioner was paid $50 per month and she either received this check or had the check deposited into the insurance agency's account or the parties' personal account. The minimal involvement of petitioner in Morse does not compare with the totality of respondent's efforts in running and maintaining a 1,006-acre farm. We conclude that respondent's personal efforts in this case were significant.
Likewise, respondent's personal efforts substantially appreciated the value of the farm. Respondent states that the circuit court reasoned that the value of the farm was substantially appreciated by respondent's personal efforts on the basis that the value of the property increased from $260,000 at the date of the creation of the trust in 1979, to $352,100 at the time of trial. Respondent argues that since there is no indication that the $260,000 value assigned to the farm by Arthur Tatham at the time of the creation of the trust was the fair market value and that since this figure could represent either a higher or lower value than the farm was actually worth in 1979, the circuit court's determination that the farm was substantially appreciated was erroneous.
Upon a review of the circuit court's order of April 13, 1987, we find that the circuit court did not state that it was basing its determination of substantial appreciation upon the premise given by respondent. From the circuit court's order it cannot be determined what the factual basis was for its determination that the farm was substantially appreciated; however, we find that there was adequate evidence before the circuit court from which it could make this Conclusion. Respondent had attempted to expand the profit of the farm by changing the use of the farm from cattle raising to growing crops. The fact that he was unsuccessful does not show that the farm did not appreciate, as the losses of the farm were due more to external factors than because of any actions of the respondent. Just as the Illinois Supreme Court held that appreciation in value cannot be determined by factors that are external from the marriage, likewise, the fact that crops failed because of external factors beyond the control of the parties to the marriage cannot be indicative that the property did not appreciate in value. (In re Marriage of Komnick (1981), 84 Ill. 2d 89, 417 N.E.2d 1305.)Because of respondent's efforts, a riding stable and an arena for show horses were constructed on the farm property. This addition substantially increased the value of the farm. Further, the fact that respondent continued the day-to-day operation of the farm and did not permit the farm to deteriorate was another factor that the circuit court may have considered. Whenever strenuous efforts are made to maintain property values against overwhelming external factors such that it appears that the efforts were for naught, and especially in this time of ever-increasing problems besieging the agriculture industry, it cannot be said that the property was not substantially appreciated even though the application of numerical values may appear to belie those efforts.
The only evidence of value of the farm as of 1979 presented by either party was the value stated in the trust. Both parties' appraisers valued the farm in 1986 at a higher value than given in the trust. The evidence offered supports the circuit court's Conclusion that the property did appreciate under respondent's management. Where there is competent evidence to support a circuit court's decision, we will not overturn its determination absent an abuse of discretion. (In re Marriage of Mullins (1984), 121 Ill. App. 3d 86,458 N.E.2d 1360.) Because respondent's contribution of personal efforts was both significant and resulted in substantial appreciation of the farm, we affirm the circuit court's determination that the marital estate was entitled to reimbursement for that contribution and that petitioner was properly awarded one-half of that reimbursement.
Respondent's next contention on appeal is that the circuit court erred when it ordered him to pay petitioner $16,200 for her homemaker contribution. He argues that since petitioner worked outside the home, and since petitioner failed to show that her contribution as homemaker was greater than respondent's contribution to the home, the circuit court abused its discretion when it awarded her the sum of $16,200. We agree.
In this case, petitioner was an expert horsewoman and respected in her field for her ability to train and to show horses. Prior to her marriage to the respondent, she obtained a bachelor's degree from Smith College and a partial master's degree from Murray State University. At Murray State University, petitioner set up a riding program and conducted courses on breaking and training horses and on various levels of western and English horsemanship. After college she became self-employed as a horse trainer and an instructor. She also worked as a veterinary assistant. After her marriage to the respondent, petitioner worked approximately a thousand hours on the farm, but after the establishment of High Meadows Stables, she spent less time working on the farm and more time working at the stables. The High Meadows Stables became operational in late 1977 and early 1978, within a year of the parties' marriage. Petitioner testified that out of her earnings she contributed to 50% of the family's expenses. She stated that she did such homemaker chores as cooking and cleaning, but as her business at the stables increased, a cleaning lady was hired to come in once a week. She further testified that she ...