The opinion of the court was delivered by: Justice Rakowski
Appeal from the Circuit Court of Cook County.
Honorable Patricia Banks, Judge Presiding.
Pursuant to a judgment of dissolution, Harold Kaufman was ordered to pay Gail Kaufman spousal maintenance. Between January of 1991 and April of 1994, Harold encountered financial difficulties due to a substantial reduction in his income and was unable to make full payments. However, he made partial payments at Gail's attorney's request. In May of 1994 after withdrawing funds from his pension and incurring penalties, Harold made a lump-sum payment for all past-due amounts.
Thereafter, Gail petitioned for interest accruing from the late payments. Following a hearing, the trial court denied the petition, holding that the equities did not support an award of interest.
The sole issue before this court is whether section 2-1303 of the Code of Civil Procedure (735 ILCS 5/2-1303 (West 1996) (statutory section authorizing interest on judgments)) is mandatory in dissolution proceedings or whether an award of interest is within the discretion of the trial court. On appeal, Gail contends that interest is mandatory pursuant to section 2-1303 and that the supreme court's decision in Finley v. Finley, 81 Ill. 2d 317 (1980), does not control because it applies only to child support payments. Further, she contends that even if Finley does apply, it no longer controls because the legislature enacted section 505(d) of the Illinois Marriage and Dissolution of Marriage Act (750 ILCS 5/505(d)(West 1996)) in response thereto, which now makes interest mandatory. We disagree with both positions and affirm.
The facts are undisputed and, therefore, the issue before us is a question of law. We review questions of law de novo. Branson v. Department of Revenue, 168 Ill. 2d 247, 265 (1995).
Section 2-1303 provides: "[j]udgments recovered in any court shall draw interest at the rate of 9% per annum from the date of the judgment until satisfied." 735 ILCS 5/2-1303 (West 1996). This language is clear and unambiguous.
Nevertheless, in Finley v. Finley, 81 Ill. 2d 317, 331 (1980), our supreme court has held that section 2-1303 does not apply to dissolution actions. The court noted that there was a split of authority on the issue. Some appellate court cases had held that the award of interest was within the sound discretion of the dissolution Judge. See Sutton v. Lieb, 199 F.2d 163 (7th Cir. 1952) (applying Illinois law); Matzen v. Matzen, 69 Ill. App. 3d 69 (1979); In re Estate of Neirinck, 62 Ill. App. 3d 189 (1978); Atwater v. Atwater, 18 Ill. App. 3d 202 (1974); Anderson v. Anderson, 48 Ill. App. 2d 140 (1964); Kaifer v. Kaifer, 286 Ill. App. 433, 439-40 (1936). Conversely, other appellate court decisions had held that interest was recoverable on dissolution judgments because they too were money judgments. See Ellingwood v. Ellingwood, 25 Ill. App. 3d 587 (1975); Neeland v. Neeland, 17 Ill. App. 3d 803 (1974); Gregory v. Gregory, 52 Ill. App. 2d 262 (1964); Shuff v. Fulte, 344 Ill. App. 157 (1951); Wadler v. Wadler, 325 Ill. App. 83 (1945).
After recognizing the split and analyzing other supreme court cases, the Illinois Supreme Court stated:
"This court has held that a divorce proceeding partakes so much of the nature of a chancery proceeding that it must be governed to a great extent by the rules that are applicable thereto. (Bremer v. Bremer (1954), 4 Ill. 2d 190, 192.) In a chancery proceeding, the allowance of interest lies within the sound discretion of the trial Judge and is allowed where warranted by equitable considerations and is disallowed if such an award would not comport with Justice and equity. (Galler v. Galler (1975), 61 Ill. 2d 464, 474; Groome v. Freyn Engineering Co. (1940), 374 Ill. 113, 131; Duncan v. Dazey (1925), 318 Ill. 500, 527; McKey v. McCoid (1921), 298 Ill. 566, 572.) As stated in Groome, 'In a proper case, equitable considerations permit a court of equity to allow or disallow interest as the equities of the case may demand.' (374 Ill. 113, 131.) We therefore conclude that the allowance of interest on past-due periodic support payments is not mandatory as contended by the plaintiff, but lies within the sound discretion of the trial Judge, whose determination will not be set aside absent an abuse of that discretion." Finley, 81 Ill. 2d at 332.
Accordingly, Finley decided the split of authority and held that, in dissolution proceedings, section 2-1303 is not mandatory but the award of interest is instead ...