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June 29, 1994


Appeal from the Circuit Court of Winnebago County. No. 90-D-704. Honorable Richard W. Vidal, Judge, Presiding.

Released for Publication August 3, 1994. As Corrected August 17, 1994.

Quetsch, Inglis, Bowman

The opinion of the court was delivered by: Quetsch

JUSTICE QUETSCH delivered the opinion of the court:

Petitioner, Marilyn S. Marriott, brought this action in the circuit court of Winnebago County seeking the dissolution of her marriage to respondent, Robert F. Marriott. On September 17, 1992, the trial court entered a judgment of dissolution of marriage. Marilyn appeals and Robert cross-appeals from that judgment. On appeal, Marilyn argues that the trial court erred in its distribution of marital assets and erred in treating a payment to her during the pendency of the proceedings pursuant to an agreed order as an advance of her share of marital property. In his cross-appeal, Robert argues that the trial court erred in classifying certain assets as marital property. Robert also argues that the trial court erred in reserving jurisdiction to award maintenance for a period of six years and in ordering him to report periodically on his financial status during the period of reserved jurisdiction.

Robert and Marilyn were married in January 1977. It was the second marriage for both parties, and both were in their early fifties at the time of the dissolution proceedings. Robert and Marilyn had no children together, but Robert has a son, Robert, Jr., and a daughter, Martha, from his first marriage. During certain periods of the marriage Robert's children, who were then in their teens, resided with the couple.

Robert is a high school graduate and was employed by Barnes Drill Co. (Barnes Drill) for 22 years concluding in 1980. Prior to 1980, members of Robert's family were Barnes Drill's principal shareholders, and Robert ceased to be employed by Barnes Drill when his family disposed of its interest in the corporation. The last position Robert held with Barnes Drill was "sales engineer." During the rest of the marriage, Robert held a number of jobs principally involving sales or telemarketing activities. At times, Robert experienced long periods of unemployment, and he described his employment history during the marriage as "spotty." During the later stages of the dissolution proceedings, Robert was working 40 to 45 hours a week in a temporary position at a wage of $4.25 per hour.

At the time of the marriage, Marilyn was employed by Barnes Drill as an industrial nurse, and she continued to work in that position during the first year of the marriage. According to her testimony, Marilyn held three other nursing positions during the marriage. She was employed by Rockford Memorial Hospital from 1980 to 1982. In 1986 and 1987, she was employed by Foster Infusion Care. In 1990, shortly before filing the petition for dissolution, Marilyn obtained a part-time position at Oakwood Hospital. During the marriage, Marilyn also took nursing courses at Rockford Memorial Hospital and Rockford College. When she was employed, Marilyn deposited her earnings in a checking account maintained in her name individually. She used her earnings to buy groceries occasionally and to buy gifts for members of her family and Robert's family.

Marilyn also assumed certain parental responsibilities with respect to Robert's children from his first marriage. Robert, Jr., moved in with the couple in 1984 or 1985, at which time he was in the eighth grade. After completing the ninth grade, Robert, Jr., attended a military school in Wisconsin, and after completing high school in 1988, he moved back in with Robert and Marilyn for about a year. Robert's daughter, Martha, moved in with the couple in the spring of 1987. She was 16 years old at the time. The record reflects some confusion about whether Martha attended a private boarding school in Michigan during the 1987-88 school year or attended school locally. However, the following year (Martha's senior year in high school), she attended a local school and resided with Marilyn and Robert. When the children were living with the couple, Marilyn attended to transportation of the children to school and extracurricular activities, parent-teacher conferences, and the children's other needs. Marilyn also visited Robert, Jr., at military school and attended school functions. Sometimes Robert accompanied her, and on other occasions Marilyn went by herself.

At the time of the dissolution proceedings, Marilyn suffered from severe respiratory or pulmonary ailments, including asthma, emphysema, and bronchitis. The testimony of Marilyn's physician, Dr. Phil Zimmerman, was presented in the form of an evidence deposition. Dr. Zimmerman indicated smoking was a major cause of Marilyn's respiratory problems. Dr. Zimmerman indicated that Marilyn's condition limited her occupational prospects to sedentary work or employment involving light physical activity. He testified that her condition would probably require absences from the workplace, diminishing her prospects for maintaining full-time employment. Marilyn expressed the opinion, based on her familiarity with the nursing employment market, that her medical condition would prevent her from securing full-time employment as a nurse.

The property distribution issues raised on appeal and cross-appeal relate to two assets found by the trial court to be marital property: the marital residence located at 5328 East Drive in Loves Park and the proceeds from the liquidation of a Van Kampen Merritt mutual fund (the VKM fund). Prior to the marriage, the property at 5328 East Drive was owned by Robert's parents, Roger and Jeanne Marriott. On May 27, 1976, approximately eight months prior to the marriage, Roger and Jeanne conveyed the property into a land trust pursuant to which they were cotrustees and beneficiaries. The same day, however, Jeanne and Roger assigned the entire beneficial interest to Robert. At about this time Robert moved into the house. In 1982, at Robert's direction in accordance with the terms of the trust agreement, Robert's parents delivered a trustee's warranty deed conveying the property to Marilyn and Robert as joint tenants. The VKM fund was purchased during the marriage and was held by Robert and Marilyn in joint tenancy. The money invested in the VKM fund represented the proceeds received by Robert in 1980 from the Disposition of common stock in Barnes Drill which Robert had acquired before the marriage or had inherited or acquired as a gift. The proceeds from the Disposition of the Barnes Drill stock were originally invested in other securities, but it appears to be undisputed that the proceeds are directly traceable to the VKM fund.

Robert testified that he placed both the marital residence and the VKM fund in joint tenancy with Marilyn because she had stated that she wanted to have property placed "in her name." According to Robert, by placing the assets in joint tenancy, it was his intent to provide "temporary satisfaction" to Marilyn; he did not intend to make a gift of the assets. With respect to the marital residence, Marilyn expressed her desire to have partial ownership during several conversations with Robert. According to Robert, Marilyn was "tenacious," "aggressive," and "insistent" during these conversations. Robert admitted that he never indicated to Marilyn that he intended the transfer only to be temporary.

Robert testified that in 1987 he decided that he had made a mistake by placing the VKM fund in joint tenancy. Robert had become concerned because Marilyn had stated that if she had access to the money invested in the fund she would spend it all. In addition, Robert sought to use the VKM fund as collateral for a loan in connection with an investment opportunity, and he apparently did not want the transaction to hinge upon Marilyn's consent or her willingness to sign the loan and security documents. The record contains a copy of a letter to Marilyn from Robert's attorney, Steven Sproul, requesting Marilyn to sign two enclosed blank stock powers. The letter further stated, "I am attempting to clear up some confusion over this Van Kampen Merritt account and accordingly I need these powers executed at your earliest convenience." The record also contains a printed stock power form bearing what appears to be Marilyn's signature, but otherwise left blank. Robert admitted that these documents were an attempt to trick Marilyn into transferring her interest in the VKM fund to him. Marilyn denied signing the stock power, although she testified that the signature on the stock power appeared to be hers. She also denied receiving the letter from Sproul.

During the marriage, Robert received gifts from his parents and grandmother in the total amount of $30,000 annually. Robert deposited the money into a savings account established prior to the marriage. Robert and Marilyn also maintained a joint bank account during the marriage. Property taxes on the marital residence were paid with checks drawn on this account. However, Robert transferred funds to the joint account from his premarital savings account to cover the tax payments. The marital residence was redecorated in 1981 at Robert's expense. At some point, a gazebo was built on the property at a cost of $7,000. Marilyn financed the construction of the gazebo with an interest-free loan to Robert which Robert later repaid.

Marilyn filed her petition for dissolution of marriage on May 14, 1990. The same day she filed a petition for temporary relief, requesting, among other things, that she be awarded sole and exclusive possession of the marital residence during the pendency of the case. Robert subsequently filed a cross-petition seeking similar relief in his favor. On August 13, 1990, an agreed order was entered pursuant to which Robert was granted occupancy of the marital residence and Marilyn was ordered to vacate the premises. In turn, the agreed order provided that Marilyn was to receive a payment of $7,500 and weekly temporary maintenance payments of $250. In presenting the agreed order to the trial court, Robert's attorney stated that "the $7,500 is not intended by the parties to be maintenance but the distribution to Mrs. Marriott of cash advance." However, Robert's attorney also indicated that it was his understanding that "the issue of credit against the ultimate settlement is reserved by the Court for future determination in the trial of this case." The agreed order itself provided that "the Court reserves jurisdiction to determine whether or not the $7,500.00 shall be taken from the marital estate as opposed to the non-marital estate of [Robert] or as to whether or not [Marilyn] must account for said monies in the final distribution of the parties' assets. " (Emphasis added.) In connection with the agreed order, the VKM fund was liquidated and $7,500 from the proceeds was distributed to Marilyn.

On October 31, 1990, Robert filed a petition seeking to reduce his temporary maintenance obligation pursuant to the agreed order. Robert represented that he had agreed to pay the $250 weekly maintenance payments based on his understanding that the case would proceed quickly to trial. Robert contended, in essence, that he lacked the financial resources to make the weekly payments on a long-term basis. An evidentiary hearing was held on November 29, 1990, and on December 31 the trial court entered an order terminating the $250 weekly temporary maintenance on the basis of a substantial change in the circumstances of the parties.

The trial court entered its judgment of dissolution on September 17, 1992. Following post-trial motions the judgment of dissolution was modified on February 4, 1993. The trial court determined that both the marital residence and the VKM fund were marital property. The court found that Robert had failed to overcome the presumption that these assets were a gift to the marital estate. The court concluded, however, that Robert was entitled to a two-thirds share of the marital residence based on his greater contribution to the acquisition and preservation of the asset. The court placed a value of $60,000 on the marital residence and awarded the residence to Robert subject to an offsetting payment of $20,000 to Marilyn for her one-third share of the property.

At the time of the judgment of dissolution, the proceeds of the VKM fund remaining after the previous distribution of $7,500 to Marilyn pursuant to the agreed temporary order totalled approximately $65,000. The trial court found that the $7,500 distribution was "a predistribution of marital assets." In substance, the trial court divided the VKM fund equally on the basis of its value before the $7,500 "predistribution" to Marilyn (i.e., $72,500). Thus, subject to further adjustment, each party's share of the VKM fund was $36,250. The $7,500 "predistribution" to Marilyn was credited to the $20,000 representing Marilyn's one-third share of the marital residenceand the balance of $12,500 owed for Marilyn's share of the marital residence was paid to Marilyn by an adjustment of the party's respective shares of the VKM fund. Accordingly the $65,000 balance of the VKM fund proceeds was awarded as follows: $48,750 ($36,250 $20,000 - $7,500) to Marilyn and $16,250 ($36,250 - $20,000) to Robert.

The trial court found that Marilyn was eligible for maintenance due to the impact of her medical condition on her prospects for employment but found that Robert was then unable to pay maintenance and still meet his reasonable needs. The court reserved maintenance for a period of six years and ordered Robert to report on the status of ...

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