The opinion of the court was delivered by: Justice Greiman
Appeal from the Circuit Court of Cook County
Honorable, Richard B. Berland, Judge Presiding.
Following a judgment of dissolution of marriage entered on May 15, 1996, petitioner Yvonne B. Steinberg (Yvonne) seeks reimbursement to the marital estate from three non-marital assets awarded to respondent Richard C. W. Steinberg (Richard): (1) the accounts receivable in Richard's medical corporation, (2) the money in Richard's corporate checking account, and (3) the interest earned on a certain municipal bond (the Stein Roe account).
This appeal primarily raises two issues: (1) whether the accounts receivable from a non-marital corporation are subject to reimbursement; and (2) whether the marital estate in the present case is entitled to reimbursement from the accounts receivable.In addition, Yvonne maintains that the marital estate is entitled to reimbursement from the checking account for Richard's corporation and for cash allegedly given to Richard's mother in amounts equivalent to the interest earned in the Stein Roe account held in Richard's name only.
We find that accounts receivable are subject to reimbursement, but in the present case the marital estate is not entitled to reimbursement from the accounts receivable because the annual income received by Richard during the course of the marriage adequately compensated the marital estate. For the same reason we find that the marital estate is not entitled to reimbursement from the corporate checking account. We also find that the record does not support reimbursement for the amount of interest earned on Richard's municipal bond in the Stein Roe account. Thus, we affirm the trial court's judgment.
On March 18, 1984, Yvonne and Richard married and later had two children: a son named Ryan, who was born on October 7, 1985, and a daughter named Britt, who was born on October 20, 1986. Yvonne filed a petition for dissolution of marriage on May 19, 1994, and Richard filed a counterpetition for dissolution of marriage on October 3, 1994. At the time of trial in April 1996, Yvonne was 41 years old and Richard was 46 years old.
At trial, both Richard and Yvonne testified. In addition, Richard presented three witnesses: Dr. Stanley Matthew Zydlo, Jr., chief of emergency services at Northwest Community Hospital; Kathleen Keyes, the sole office employee of Richard; and June Steinberg, the mother of Richard. The record does not include any exhibits presented at trial. The record reveals the following evidence relevant to the three non-marital assets at issue on appeal.
Richard began his medical practice in October 1980, i.e., about 3 1/2 years before his marriage to Yvonne in March 1984. In 1981, as a self-employed, sole practitioner, Richard incorporated his medical practice as Richard C. W. Steinberg, M.D.,S.C., of which he was and is the sole shareholder. The corporation collects the fees, pays the expenses for his medical practice and provides him with a salary.
Regarding the accounts receivable, the parties stipulated that, at the time of dissolution, the value of the collectibles for Richard's corporation was $215,000. Richard testified that, prior to the marriage, his accounts receivable amounted to $125,000, and that the collection rate at that time ranged between 75% to 80%.
Regarding the corporate checking account, Richard testified that, before marriage, the amount in his corporate checking account was $20,477.09. At the time of dissolution, the corporate checking account had an approximate balance of $24,000.
Richard drew a regular, gross salary of $10,000 per month from the corporation during the course of marriage. Richard would deposit the net amount of his monthly salary (about $6,445) in a joint checking account, from which Yvonne paid the bills. Richard also received annual bonuses during the course of the marriage. Richard's annual income, including salary and bonus, during the course of the marriage was as follows:
1985 - unknown (tax returns apparently were unavailable)1986 -$230,000
Richard always worked in family practice and built his practice by making himself available for emergency room calls. From at least 1984 until 1990, Richard worked emergency room call from 18 to 21 nights a month because, by being available so often, Richard received a tremendous number of referrals, including patients admitted to the hospital for care and patients coming to his office for follow-up treatment or visits. After 1990, new hospital rules reduced the amount of time a doctor could work emergency room call. In 1991 and 1992, Richard's number of call nights decreased to about 12 nights a month. In early 1993, the hospital rules again changed and Richard's nights on call decreased to seven per month. After 1994, the call schedule reduced Richard's nights per month to three. As of May 1, 1996, the then current call schedule allowed Richard only two nights per month. Richard testified that his income decreased because the changes in the rules for the hospital emergency room reduced his number of patients. In addition, Richard's income decreased because medical conditions that had been treated on an inpatient basis were now treated on an outpatient basis and because managed care groups reduced the number of his patients.
Dr. Stanley Matthew Zydlo, Jr., chairman of the department of emergency medicine at Northwest Community Hospital, and Kathleen Keyes essentially corroborated Richard's testimony. Dr. Zydlo testified that the emergency room is a source of added patients for doctors and that the hospital rules were changed to reduce the amount of time that a doctor could work in the emergency room. The rules were changed because some individuals might be overworked or getting too many patients.
Kathleen Keyes has worked in Richard's office for 14 years. Keyes performs all of the office work, takes care of patients' charts, performs some nursing functions, and prepares the billing. At the time of her testimony, Keyes was the only employee in Richard's office. Keyes testified that the number of Richard's patients decreased over the years and the billing procedure has remained virtually the same. Since 1993, Keyes has collected the payments from Richard's patients and deposited them all into the corporate checking account. Keyes testified that the current balance in the checking account was approximately $24,000.
Yvonne was not employed outside the home during the tenure of her marriage to Richard and was unemployed for six months before the marriage. Prior to marriage, Yvonne earned a bachelor's degree in merchandising and marketing from Northern Illinois University in 1977 and worked for various employers, including a brokerage firm and several different advertising agencies. The highest annual salary received by Yvonne was $19,000.
Regarding the Stein Roe account, Richard and Yvonne agreed that in 1989 June Steinberg, Richard's mother, gave Richard a gift of $10,000 and with this money Richard acquired a Stein Roe high yield municipal bond in his own name. At the time of trial the balance of the Stein Roe account was $17,523.92.
Yvonne testified that the cash equivalent of the interest earned on the Stein Roe account was given to Richard's mother. Yvonne stated that the interest is paid on the Stein Roe account twice a year. When the account statement arrived, Yvonne would prepare a check made out to cash from their joint checking account in the amount equal to the interest earned in the Stein Roe account. Yvonne produced the cancelled checks to verify that checks were made out to cash in amounts equivalent to the interest earned. According to Yvonne, the cash would then be placed in an envelope. In turn, either Richard would give the cash to his mother when they visited her in Florida or Yvonne would give the cash to her.
Richard testified that he was not aware of any such payment to his mother and did not instruct Yvonne to make such payments. Richard testified that "[i]f she [Yvonne] cashed checks in those ...