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January 17, 1995



Presiding Justice Campbell delivered the opinion of the court: Buckley, J., and Theis, J., concur.

The opinion of the court was delivered by: Campbell

PRESIDING JUSTICE CAMPBELL delivered the opinion of the court:

This is a consolidated appeal. *fn1 Petitioner, Fred W. Schomburg (Fred), appeals from orders of the circuit court of Cook County entered subsequent to entry of a judgment of dissolution of his marriage to Gail A. Schomburg (Gail). Fred appeals from the following orders of the trial court: a garnishment turnover order of June 2, 1992; an order of July 15, 1992, requiring Fred to post a bond; and an order of July 1, 1992, denying Fred's motion to reconsider the turnover order. On appeal, Fred contends that: (1) the trial court failed to comply with the statutory provisions of the Garnishment Act (735 ILCS 5/12-701, et seq. (West 1992)); (2) the trial court had no jurisdiction to enter the turnover order; (3) the trial court erred in denying Fred's motion to reconsider; and (4) the law firm of Nottage & Ward is liable for seizing statutorily exempt property under section 12-1005 of the Code of Civil Procedure. (735 ILCS 5/12-1005 (West 1992).) For the following reasons, we reverse the decision of the trial court and remand this cause for new proceedings consistent with this opinion.

The following facts are relevant to this appeal. On March 4, 1992, prior to entry of a final order of dissolution of marriage, the trial court issued a temporary restraining order (TRO) enjoining Fred from withdrawing, spending, transferring, etc., any of the funds held in Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch) RCMA account No. 626-5B94. Merrill Lynch froze the account on March 12, 1992, pursuant to the TRO. A judgment for dissolution of marriage was entered on April 10, 1991. Fred appealed from that portion of the judgment which directed him to pay attorneys fees in the amount of $39,182.07 to his own counsel, Nottage & Ward, and the judgment was affirmed by this court in an unpublished order, (No. 1-92-1520, April 12, 1993), pursuant to Supreme Court Rule 23.

Nottage & Ward filed an action for non-wage garnishment and a summons was issued to Merrill Lynch, the garnishee, on April 20, 1992, returnable on May 11, 1992. Fred was served with the garnishment summons by mail at his address in Sequim, Washington. The record does not reflect that any appearance or response was filed on the return day by either Merrill Lynch or Fred. On May 26, 1992, Merrill Lynch filed a Disclosure Statement, acknowledging that it had been served with a garnishment on April 23, 1992, and that it did have at that time:

"a customer account in the name of Fred W. Schomburg, D.D.S. Orthodontics, Ltd. MP Pension # 2, U/A 7/1/81, identified as RCMA account number 626-05B94."

The TRO expired on May 29, 1992. At that time, Fred's counsel objected to a preliminary injunction, arguing that the monies requested in the turnover were exempt by statute, (735 ILCS 5/12-705 & 5/12-1006 (West 1992)), and the trial court continued the hearing to June 2, 1992.

On June 2, 1992, Nottage & Ward appeared again on their garnishment petition, asked for a turnover order, and informed the trial court that Fred had waived his right to argue that the funds were exempt as being in a pension plan for failure to make a timely objection by April 27, 1992. Neither Fred nor any representative of Merrill Lynch appeared at the hearing. Fred's counsel argued that the case of Jakubik v. Jakubik (1991), 208 Ill. App. 3d 119, 566 N.E.2d 808, 152 Ill. Dec. 931, prevented garnishment of Fred's exempt "pension and financial account." There, the court determined that the garnishment of an Individual Retirement Account (IRA) to pay for the wife's attorneys fees in divorce proceedings was improper. Jakubik, 208 Ill. App. 3d at 126.

The trial court distinguished Jakubik on the ground that the garnishment of the account in the present case was to pay for the husband's own attorneys fees. The trial court found that Fred waived both his objections to the garnishment and his argument for exemption for failure to timely present such issues. The trial court concurrently entered the turnover order.

On June 10, 1992, Fred filed a timely motion to reconsider the turnover order. In response, Nottage & Ward filed a motion to strike and dismiss Fred's motion. A hearing on the motions commenced on July 1, 1992. At that time, the trial court denied Nottage & Ward's motion to strike. Fred did not appear in court. The trial court granted Fred's motion to reconsider to determine whether or not the subject account qualified for exemption status as a qualified retirement plan pursuant to section 12-1006 of the Code of Civil Procedure (735 ILCS 5/12-1006 (West 1992)) as required by the case Auto Owners Insurance v. Berkshire (1992), 225 Ill. App. 3d 695, 588 N.E.2d 1230, 167 Ill. Dec. 1100. Fred's counsel offered to produce to Nottage & Ward documents from the IRS showing that the account was exempt. The trial court set a hearing on this issue for July 15, 1992. Nottage & Ward argued that the granting of a hearing on reconsideration effectuated a stay of enforcement of the turnover order, and therefore requested that Fred post a bond to secure the turnover judgment. The trial court ordered a bond of $40,000 to cover the amount of the turnover judgment.

At the scheduled hearing on July 15, 1992, Nottage & Ward notified the trial court that Fred had failed to appear for a scheduled deposition and failed to post bond as ordered by the court. Fred's counsel informed the court that the bond order was outside the court's authority because Fred had not requested a stay. The trial court stated that Fred's counsel would not be able to put on evidence regarding the exemption of the account unless a security bond was paid, and then continued the evidentiary hearing until July 24, 1992, allowing time for Fred to comply with the bond order.

On July 24, 1992, the trial court entered an order finding that Fred failed to post a bond, denying Fred's motion to reconsider the order of June 2, 1992, and directing ...

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