The opinion of the court was delivered by: Justice Murray
Robert I. Olsen (Mr. Olsen) appeals from a circuit court order dated April 24, 1991, and the order denying his motion to reconsider, contending that the trial court incorrectly interpreted certain provisions of the marital settlement agreement contained within his judgment of dissolution of marriage.
The facts are as follows:
On March 23, 1988, Mr. Olsen petitioned the circuit court of Cook County to have his marriage to Denise L. Olsen (Mrs. Olsen) dissolved. The cause was uncontested and a judgment of dissolution of marriage was entered on April 6, 1988. Incorporated into the judgment was a detailed "Marital Settlement Agreement," which was signed by both parties and which addressed, among other things, the custody, support and maintenance of the parties' two children.
The agreement provided that each of the parties would be awarded the custody of one of their two children and that Mr. Olsen would pay Mrs. Olsen $495 per month in support for the child in her custody. This amount was based upon the fact that at the time of the decree Mr. Olsen's net income was $625 per week and Mrs. Olsen's net income was $300 per week. In addition to the set amount of $495, the agreement further provided in paragraph 2.2 that: "Husband shall also pay to Wife a sum equal to 20% of any bonus he receives so long as Wife retains custody of [child] and until [child] reaches 18 years of age."
The agreement also contained other provisions pertaining to the handling of income tax returns and the division of property and real estate.
In February 1990 Mrs. Olsen filed a petition with the court asking that Mr. Olsen be directed to show cause why he should not be held in contempt for failure to comply with certain provisions of the marital agreement. Specifically, Mrs. Olsen requested (1) that Mr. Olsen pay her 20% of his 1988 and 1989 bonuses, (2) an increase in child support, (3) reimbursement for extraordinary medical expenses in the amount of $450, and (4) automatic withholding of child support from Mr. Olsen's wages. Mr. Olsen did not appear at a hearing held March 1, 1990, and an ex parte order was entered on that date granting Mrs. Olsen's petition.
On March 23, 1990, Mr. Olsen filed a motion to have the ex parte order vacated. In addition, Mr. Olsen petitioned the court for a reduction of his child support obligation based upon the fact that he had become unemployed. He also requested reimbursement of $1,592 from Mrs. Olsen for income taxes due for the 1986 tax year.
A hearing was held on October 31, 1990, at which time the court agreed to vacate the March 1, 1990, ex parte order. In addition it was agreed that two of the issues in Mrs. Olsen's petition, i.e., the request for an increase in child support and for automatic withholding, had been mooted by Mr. Olsen's loss of employment. The court dismissed these issues without prejudice, granted Mrs. Olsen $250 for extraordinary medical expenses and continued all other issues until December 4, 1990. An order to this effect was issued on November 1, 1990.
At the December 4, 1990, hearing both parties testified and Mrs. Olsen presented a certified public accountant (CPA) as a witness. Subsequently, both parties filed written memoranda with the court and on January 25, 1991, the court issued its findings, which were then incorporated into a written order dated April 24, 1991. In this order the court: (1) found that payments made by Mr. Olsen from "funds received by him as dividends" were voluntary payments and not to be credited to amounts due under the judgment of dissolution, (2) found that the judgment of dissolution required Mr. Olsen to pay 20% of the gross of the bonuses he received between August 1988 and February 1990, (3) granted a reduction in child support from $495 to $240 effective March 1990, and (4) denied Mr. Olsen's petition for reimbursement from Mrs. Olsen for 1986 tax liability.
Mr. Olsen filed a motion for reconsideration, which was denied by the court. He now brings this appeal, raising four issues: (1) whether the trial court erred by finding that certain overpayments he made should not be credited toward his child support obligation, (2) whether the trial court erred by interpreting the marital agreement as requiring him to pay 20% of the gross of his bonuses, as opposed to 20% of his net bonuses, (3) whether the trial court abused its discretion by ordering him to pay $240 per month child support while he was unemployed, and (4) whether the trial court erred by refusing to require Mrs. Olsen to contribute 50% of the tax liability for the 1986 tax year.
We shall consider the first two issues raised by Mr. Olsen together because they are related to one another. Initially we note that Illinois courts have adopted the general rule that no credit shall be given for any voluntary overpayment of child support, even if the overpayment was made because the party was under the mistaken belief that the payment was legally required. (Harner v. Harner (1982), 105 Ill.App.3d 430, 61 Ill.Dec. 312, 434 N.E.2d 465.) The rationale for this rule is that such a credit would be tantamount to allowing one party to unilaterally modify the divorce decree and could result in a future deprivation. (Harner, 105 Ill.App.3d at 433, 61 Ill.Dec. 312, 434 N.E.2d 465.) Exceptions to the general rule have been recognized, but only where equity demands and the credit would not work a hardship, such as where the parties entered into a separate agreement whereby the party entitled to support agrees to allow the party providing the support to pay certain necessary expenditures in lieu of the support allotment and where the father has been in substantial compliance with the spirit and intent of the divorce decree. (See Farmer v. Farmer (1978), 147 Ga.App. 387, 249 S.E.2d 106.) There is also an exception for involuntary overpayment where the overpayment results from a court-ordered wage reduction.
Although Mr. Olsen agrees with the general rule, he claims that equity demands an exception to the rule in this case. We tend to agree.
The whole controversy arose when Mrs. Olsen contended that Mr. Olsen had failed to pay "20% of any bonus" he received in 1988 and 1989, as required by the provision contained within paragraph 2.2 of the marital agreement quoted above. By virtue of this claim, the provision became the subject of much debate. To understand this controversy, a bit of background information is helpful.
Mr. Olsen had been employed as a construction supervisor for a company owned by his father-in-law. As salary he received a base pay plus "bonuses," which were based upon the company's earnings. Additionally, Mr. Olsen owned 3% stock in the company, from which he derived "dividends" (later referred to as S corporation earnings). According to the parties' testimony, until Mrs. Olsen's petition was filed, both Mr. and Mrs. Olsen had been interpreting the "20% of any bonus" provision to mean that Mr. Olsen was to pay Mrs. Olsen 20% of the net amounts he received as his "bonuses" as well as his " dividends."
At the October hearing, Mr. Olsen's counsel asserted that in 1988 Mr. Olsen received three "bonuses" totaling $14,288 and "dividends" totaling $8,258 and that Mr. Olsen had paid to Mrs. Olsen 20% of the net of these amounts. He claimed that Mr. Olsen determined the amount he must pay to Mrs. Olsen by computing the net amount of his bonus and/or dividend, arrived at by taking the actual or gross amount and subtracting 28% (Mr. Olsen's tax bracket). He then paid Mrs. Olsen 20% of the resulting amount.
At the same hearing, Mrs. Olsen's counsel informed the court that
the dispute was over the calculation of the 20% of the bonuses and
Counsel stated that Mrs. Olsen wanted the court to determine the
deductions that were made on the bonuses and dividends, as opposed to
theoretical" 28% tax deduction, and then take 20% of that figure.
did not contend that the gross amount should be used. In fact, counsel
presented a CPA as a witness to testify to the computations for
the "actual" deductions that were made to the bonuses and dividends.
began, but did not complete, his testimony regarding this matter and the
hearing was continued until December 4, 1990.
On December 4, 1990, the hearing opened with Mr. Olsen's testimony regarding his petition. He asserted that he had been forced from his employment by his father-in-law and was now unemployed and unable to meet his support obligations. He testified as to his income and expenses from the date of his unemployment in March 1990. He also testified concerning the additional taxes he had paid on the 1986 tax return, for which he was requesting reimbursement from his wife. However, he did ...