Appeal from the Circuit Court of Kane County. No. 92--D--403 Honorable M. Karen Simpson, Judge, Presiding.
The opinion of the court was delivered by: Justice Grometer
Respondent, Robert Alan Ackerley, appeals a series of orders entered by the circuit court of Kane County arising out of litigation where petitioner, Terry Frances Ackerley, sought, inter alia, the enforcement of various provisions of the parties' marital settlement agreement. Relevant to the instant appeal, the trial court (1) ordered respondent to pay a child-support arrearage in the amount of $90,975.41; (2) set respondent's current child-support obligation at $3,000 per month; (3) found respondent in contempt for failing to comply with a provision of the marital settlement agreement; (4) awarded petitioner $2,300 for attorney fees incurred while seeking the enforcement of the agreement; and (5) denied respondent's request to stay the enforcement of the judgment for the child-support arrearage. For the reasons that follow, we dismiss this appeal in part and otherwise affirm as modified.
On March 30, 1992, the circuit court entered a judgment dissolving the marriage between petitioner and respondent. This order incorporated a written marital settlement agreement. By the terms of the agreement, the parties were awarded joint custody of their son and daughter, and the children were to reside with petitioner. At the time of the dissolution, respondent was employed by the Krughoff Company (Krughoff) and earned a base annual salary of $62,000 plus bonuses. The agreement provided that respondent would pay a base amount of child support of $250 per week and additional child support equal to 25% of any "net bonus as defined by statute" received by him from his employer. It also contained the following provision: "For verification purposes, father shall provide mother with copies of W-2 forms or other tax related statements indicating the bonus he has received on or before January 31st of every calendar year for the preceding calendar year."
Respondent remained current on his weekly child-support payments, which increased to $420 in July 2000. He also paid petitioner a portion of his bonus each January through the year 2000.
In 1998, respondent became president of Krughoff. A written employment agreement was executed in April of that year and was periodically updated. The agreement provided for a base salary of $120,000 per year and an additional payment of $7,500 quarterly if Krughoff achieved at least that much profit during the quarter. Further, respondent was to receive year-end bonuses if certain profit levels were attained. The agreement also provided that respondent would lend a portion of his bonus back to the company. In 1998, the agreement specified a 25% loan. In 1999, this figure was reduced to 15%. Krughoff paid respondent 7% interest on these loans, which were memorialized by a series of notes. Krughoff was scheduled to start repaying these loans on December 31, 2002. Respondent's income at the time of the trial was $3,211.34 per week or approximately $167,000 per year.
Each January from 1994 to 2000, respondent provided petitioner with a written explanation of how the amount of child support due on his bonuses was calculated. Respondent did not provide petitioner with W-2 forms or other similar documents generated for reporting income to the taxing authorities. The documents that were provided were apparently generated by someone at Krughoff. Except for the document explaining the 1994 bonus, which is handwritten, they were produced on paper bearing Krughoff's letterhead. None of them show respondent's total income for the year. They do show the total bonus as well as deductions for state and federal income tax, social security tax (FICA), and dependent health insurance.
In addition to the bonuses disclosed in the January statements, respondent received bonuses in June 1999 and January 2000 that he did not disclose. In June 1999, respondent received a bonus in the amount of $58,870. He testified that he received this bonus in June because of an accounting error that was discovered when the company's records were reviewed by an outside auditor who determined that the bonus should have been paid to him previously. Respondent testified that he asked a friend, who was an attorney, what he should do regarding this bonus and the friend told him he "shouldn't worry about it." In January 2000, respondent received two bonuses. The first was in the amount of $235,400 and was disclosed to petitioner. Respondent paid child support on this bonus. The second, in the amount of $145,655, was not disclosed to petitioner, and no child support was paid based on this bonus. Respondent explained that, on the advice of an individual who runs a concrete company, he came to believe that he was entitled to deduct sums that he lent to the company pursuant to his employment agreement from his bonuses for the purpose of calculating child support. Accordingly, he unilaterally deducted $145,000 from his 2000 bonus, as he had not deducted these sums for previous years. Respondent also acknowledged that he once asked that his weekly paycheck be increased instead of waiting to receive money due him in his yearly bonus and that on one occasion Roy Krughoff, the company's chief executive officer, increased his weekly salary so that respondent would not have to wait for his bonus.
The trial court found respondent in contempt, ordered that he pay back child support due on his bonuses as well as $2,300 for petitioner's attorney fees, terminated the bonus child-support system under which the parties had been operating, and fixed monthly child support at $3,000. The trial court found respondent in indirect civil contempt for failing to provide petitioner with his W-2 forms or other tax-related documents. The trial court reasoned that the plain language of the marital settlement contemplated that respondent would provide petitioner with a document that was "categorically equivalent to a W-2 statement" as opposed to the self-produced summaries that respondent had provided. The court also found that respondent bore an affirmative obligation to provide such documents, regardless of any action or inaction by petitioner, since the marital settlement agreement stated respondent "shall" provide them. The court observed that "shall" is a mandatory term. The court found respondent's failure to tender these documents to be "willful and contemptuous." Specifically, the court found that respondent was trying to create the appearance of complying with the agreement when, in fact, he was intentionally secreting information from petitioner.
The trial court then found that respondent was not entitled to deduct from his bonuses sums loaned back to Krughoff pursuant to his employment agreement. The court stated that it viewed these loans as something "in the nature of some kind of a tax deferred interest bearing account." The court then calculated the amounts due on the bonuses respondent received from 1994 through 1999. The trial court deducted federal income taxes, state income taxes, and Medicare taxes from the bonuses before calculating the amount due. It did not deduct FICA or expenditures for dependent health insurance. The trial court also added income tax refunds back into the bonuses. The trial court adjusted the tax refunds by deducting amounts attributable to respondent's second wife.
After calculating the arrearage for the disclosed bonuses for the years 1994 to 1999, the trial court awarded petitioner $27,032.50 for the two bonuses that were not disclosed. Next, the trial court considered what it termed "excess bonuses." The court noted that for the years 1998 to 2000, approximately $145,000 was not accounted for in either respondent's base pay or bonuses; this amount the court referred to as "excess bonus." Accordingly, the court found that this too was bonus money, and it awarded petitioner $35,527.71 based on this sum. Ultimately, the trial court determined that respondent owed a total of $90,975.41 in back child support.
The trial court next addressed the issue of current child support. The trial court terminated respondent's obligation to pay a percentage of his bonuses as support and instead calculated his monthly obligation based on his total income. The court determined that, if it were to follow the statutory guideline, support would be set at $5,510 per month. However, the court found that fixing support at this level would result in a windfall to the children. Accordingly, the court deviated downward from the statutory guideline and set support at $3,000 per month.
Finally, the trial court ordered that respondent contribute $2,300 toward petitioner's attorney fees. The court stated that it was awarding fees pursuant to sections 503(j) and 508(b) of the Illinois Marriage and Dissolution of Marriage Act (Act) (750 ILCS 5/503(j), 508(b) (West 2000)). In making this award, the trial court stated that it had considered the relevant factors set forth in these sections.
Respondent then moved to stay the enforcement of the court's order and sought to present an appeal bond. The trial court denied respondent's request. The trial court held that section 413(a) of the Act (750 ILCS 5/413(a) (West 2000)) precluded staying the enforcement of an order directing the payment of child support pending an appeal.
On appeal, respondent raises five primary issues. First, he contends that the trial court incorrectly calculated the child-support arrearage. Second, he complains that the trial court erred in fixing child support at $3,000 per month. Third, he asserts that the trial court erred by finding him in contempt. Fourth, he contends that the trial court's award of attorney fees was erroneous. Fifth, he argues that the enforcement of the trial court's order should have been stayed pending appeal. We will address these issues seriatim.
A. The Child-Support Arrearage
Respondent raises two basic complaints regarding the trial court's calculation of the child-support arrearage. He contends that the trial court did not give him credit for every deduction to which he was entitled in determining his net bonuses for the purpose of calculating support. He also takes issue with the trial court's math. The parties' marital settlement agreement provided that respondent was obligated to pay child support in "a sum representing twenty-five (25%) of his net bonus as defined by statute." The relevant statutory provision, section 505(a)(3) of the Act, defines "net income" as follows:
"(3) 'Net income' is defined as the total of all income from all sources, minus the following deductions:
(a) Federal income tax (properly calculated withholding or estimated payments);
(b) State income tax (properly calculated withholding or estimated payments);
(c) Social Security (FICA payments);
(d) Mandatory retirement contributions required by law or as a condition of employment;
(f) Dependent and individual health/hospitalization insurance premiums;
(g) Prior obligations of support or maintenance actually paid pursuant to a court order;
(h) Expenditures for repayment of debts that represent reasonable and necessary expenses for the production of income ***." 750 ILCS 5/505(a)(3) (West 2000).
The determination of the amount of a child-support arrearage is a factual issue; therefore, we will disturb the decision of the trial court only if the decision is contrary to the manifest weight of the evidence. In re Marriage of Belluomini, 104 Ill. App. 3d 301, 308 (1982).
The trial court deducted only federal and state income tax and Medicare from respondent's bonuses in establishing the net bonuses that would, in turn, serve as the basis for calculating child support due on the bonuses. Respondent contends that the trial court should have also deducted from his bonuses FICA, dependent health insurance expenses, and the loans he made to Krughoff pursuant to his employment agreement. In related arguments, respondent maintains that the trial court should not have added back into his bonuses amounts received as income tax refunds or considered the effect of respondent's second wife's income on his taxes without a proper evidentiary basis. Respondent also criticizes the trial court for characterizing some of his income as "excess bonuses."
We first conclude that the trial court did not err by failing to deduct FICA and dependent health care insurance costs from respondent's bonuses. Unlike income tax, which is based on a percentage of all income, these expenditures are fixed. In re Marriage of Olson, 223 Ill. App. 3d 636, 652 (1992) (Withholding for FICA ceases after a certain income level is achieved. "Bimonthly payroll receipts for periods less than a year for a non-custodial parent with above-average income may not reflect true income because such partial records do not reflect increased income on reaching maximum FICA withholding"). Hence, in the present case, they can be either deducted from respondent's bonuses or added to respondent's base pay for calculating the base child-support amount. The mere fortuity that respondent received his bonuses early in January, which often terminated his FICA obligation for the balance of the year and allowed him to collect his base salary free of this tax, should not work to disadvantage petitioner and the children. Moreover, we note that respondent's $250-per-week child-support obligation would not have approached the statutory guideline for the support of two children if these sums were not attributed to base salary as respondent's income level increased. In short, we find no error in attributing deductions for dependent health insurance and FICA taxes to respondent's base salary instead of to his bonuses.
We further find no error in the trial court's refusal to deduct what respondent terms "mandatory loans" from his bonuses. These loans were sums withheld from respondent's yearly bonuses as set forth in respondent's written employment agreement. The loans were evinced by three notes, which reflected the terms set forth in the employment agreement. Krughoff was scheduled to begin repaying two of the loans on December 31, 2002, and one on January 1, 2003. The former two were to be fully repaid by December 31, 2004, and the latter by January 1, ...