Appeal from Circuit Court of Champaign County No. 00D200 Honorable Arnold F. Blockman, Judge Presiding.
The opinion of the court was delivered by: Justice Knecht
Petitioner, Robert Crook, and respondent, Patricia Crook, were granted a dissolution of marriage on May 11, 2000. On June 20, 2001, the trial court entered a supplemental order on ancillary issues, including the division of marital property. In dividing the marital property, the trial court awarded petitioner one-half of the present and future monthly payments respondent will receive from her pension plans. The court also ordered respondent to reimburse the marital estate for $40,000 of marital funds she contributed to her non-marital estate. Respondent appeals these two aspects of the trial court's division of the marital property.
Petitioner and respondent were married on September 6, 1966. During the course of the marriage, petitioner was a farmer while respondent worked in the home for the first 10 years of their marriage, after which she was employed as a secretary for 22 years. The parties separated in the year 2000 when petitioner announced his desire to end the marriage. During the marriage, two children were born, both of whom were emancipated when petitioner filed for dissolution.
The farmhouse where petitioner and respondent lived during most of the marriage originally belonged to respondent's parents, who deeded the property to respondent in 1983. The property consisted of a house, an attached garage, a small machine shed, a barn, a crib, and old shop, and a steel grain bin. At some point, the parties tore down an old barn on the farmland and built a new shed. They borrowed the money from Central Illinois Bank to build the shed and they paid on the loan, which was in both of their names, until petitioner quit farming in March 2000. According to petitioner, he "woke up one day" and decided to quit farming. He testified he made a better living in his current occupation as a truck driver, with an annual salary of $40,000. On cross-examination, however, petitioner stated his net farm income in 1998 was $66,611 and in 1999 it was $149,795. Petitioner denied he got out of farming because of the divorce.
When petitioner quit farming, the parties agreed to sell the farm equipment. After some of the equipment was sold, $50,000 was placed into a bank account. Petitioner testified it was his intention to place the proceeds from the sale into a separate bank account to pay any tax liabilities created by the sale. Respondent testified she did not agree with petitioner's decision to apply the proceeds to the tax liability. Petitioner testified that according to an accountant, if the parties filed a joint tax return, their tax liability for the year 2000 would be approximately $70,000.
After the petition for dissolution had been filed but before the dissolution was granted, respondent took $42,000 from the bank account and petitioner took $8,000. Because respondent felt "insecure" after petitioner filed for divorce and told her he might declare bankruptcy, she used $40,000 of the money she took to pay off part of the loan they had obtained from Central Illinois Bank to finance the construction of the new shed.
Respondent testified it had always been her intention to retire at age 55. Petitioner admitted during the marriage he was aware of respondent's desire to retire at age 55, but he did not agree with her decision. Petitioner stated he intended to work until age 65, when he would receive approximately $850 per month in social security benefits. This amount could increase if he continues to work.
Respondent, as planned, retired from her job as a secretary at Parkland College in July 2000, approximately two months after the dissolution was granted. Respondent testified Parkland had an incentive plan that offered additional retirement income for early retirement. The incentive included a lump-sum payment of "15 and some thousand dollars" and a gross amount of $757.49 per month, from which $80.50 was deducted for taxes and $87.55 was deducted for insurance. Respondent would receive monthly payments under the incentive plan for 40 months, or until July 2004.
On May 11, 2000, the trial court entered a judgment of dissolution of marriage as to grounds only. On June 20, 2001, the trial court entered a memorandum opinion and supplemental order on ancillary issues. In the June 20 order, the trial court denied respondent's request for maintenance. The trial court also discussed the parties' pension plans and determined petitioner was entitled to an equal division of respondent's retirement funds from the early retirement package from Parkland College and her State University Retirement System and Illinois Municipal Retirement Fund accounts. This equal division resulted in each party receiving approximately $838 per month based on respondent's current retirement income until July 2004. However, after July 2004, when respondent's early retirement incentive payments from Parkland cease, each party will receive only $460.20 per month from respondent's remaining retirement funds. In reaching its conclusion as to the division of respondent's pension benefits, the trial court did not consider the $850 in social security benefits petitioner would receive upon his retirement.
The trial court also discussed the "Shed Issue and IRS Debt" and determined the marital estate was entitled to reimbursement for the $40,000 respondent took from the sale of the farm equipment and applied to the debt incurred by the parties to build the shed on respondent's non-marital property. Specifically, the trial court stated: "The $40,000 came from the sale of farm equipment, clearly marital property. The large shed would be a fixture located on the farm, clearly [r]espondent's non-marital property. The marital property was clearly transmuted into nonmarital property."
The trial court rejected respondent's argument there should not be reimbursement to the marital estate because there was no evidence showing an increase in value to respondent's non-marital real property as a result of the $40,000 marital contribution toward the shed purpose. The trial court then went on to acknowledge the law in this area is "quite murky" and courts "seem to support either a 'value added' or a 'dollar[-]for[-] dollar' approach" in determining how much the marital estate should be reimbursed for contributions toward a party's non-marital estate. In this case, the trial court examined the case law and determined the "dollar-for-dollar" approach was appropriate. The trial court ordered respondent to "reimburse the marital estate by paying a greater percentage of [p]petitioner's 2000 tax liability of $67,991," and determined respondent should pay $53,995.50, which was $40,000 plus one-half of the remaining tax liability. The court also ordered respondent to pay one-half of any tax liability incurred from the sale of farm equipment in 2001.
The trial court concluded by stating, "[t]he concept of this overall distribution is an equal division of the assets," and "[t]he pension plans were divided equally between the parties." The court further stated "[t]he marital contribution to the shed was equalized by a greater contribution of [r]espondent toward an otherwise equal I.R.S. obligation. This proposed distribution is quite appropriate considering the lengthy marriage and the equal contributions of the parties."
Finally, the trial court further explained its decision to require respondent to pay a greater percentage of the tax debt:
"The [c]court is aware that this decision will impose some problems for [r]espondent in regard to payment of the tax indebtedness (ameliorated somewhat by the sale of the remainder of the personal property) and her retirement decision. The [c]court finds, however, that such a disposition is fair under the circumstances of this case to achieve an equal division of the property and debt. The [c]court notes that the [p]petitioner is working full[-]time as a truck driver. The [r]espondent is healthy and is highly employable as a secretary. Furthermore, the [p]petitioner has very little retirement funds in his own name, over and above the ...