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In Re Marriage of Kenneth W. Mathis

December 28, 2012

IN RE MARRIAGE OF KENNETH W. MATHIS, APPELLANT, AND TERRI D. MATHIS, APPELLEE.


The opinion of the court was delivered by: Justice Theis

JUSTICE THEIS delivered the judgment of the court, with opinion.

Justices Freeman, Karmeier, and Burke concurred in the judgment and opinion. Justice Garman dissented, with opinion, joined by Chief Justice Kilbride and Justice Thomas.

OPINION

¶ 1 This case presents a certified question for interlocutory review (see Ill. S. Ct. R. 308 (eff. Feb. 26, 2010)) from the Champaign County circuit court:

"In a bifurcated dissolution [of marriage] proceeding, when a grounds judgment has been entered, and when there is a lengthy delay between the date of the entry of the grounds judgment and the hearing on ancillary issues, is the appropriate date for valuation of marital property the date of dissolution or a date as close as practicable to the date of trial of the ancillary issues?"

¶ 2 The appellate court decided that the latter date was appropriate, pursuant to section 503(f) of the Illinois Marriage and Dissolution of Marriage Act (750 ILCS 5/503(f) (West 2010)). 2011 IL App (4th) 110301. For the reasons that follow, we reverse and remand for further proceedings.

¶ 3 BACKGROUND

¶ 4 Kenneth and Terri Mathis married in 1977 and had three children in the 1980s. On November 2, 2000, when the children were 16, 14, and 11 years old, Kenneth filed a petition for dissolution of marriage, and within weeks Terri filed a response. On March 26, 2001, Kenneth filed a stipulation in which he stated that the marriage was irretrievably broken, and asserted that he wished to obtain a judgment of dissolution without proof of fault. Kenneth also waived the statutory requirement that the parties live apart for two years. See 750 ILCS 5/401(a)(2) (West 2010). Terri filed a stipulation in which she too waived that requirement. That day, the trial court held a hearing on whether grounds for dissolution existed. The court's docket entry stated:

"Cause called for hearing on the issue of whether grounds for the dissolution of the parties' marriage exist. *** Witness sworn. Evidence heard.

Finding by the Court that the parties have waived the two year separation requirement. Stipulation waiving such requirement on file. Further finding that the parties have lived separate and apart for a period in excess of six months, that irreconcilable differences have caused the irretrievable breakdown of the parties' marriage, that attempts at reconciliation have failed, and that future attempts are impracticable. Based upon the aforesaid finding the parties are awarded a judgment of dissolution of marriage. Ancillary issues are reserved for future consideration. Written judgment order on grounds to be entered."

¶ 5 The cause proceeded from continuance to continuance for the remainder of 2001 and the majority of 2002. On October 23, 2002, a year and a half after the trial court's docket entry, Kenneth filed a "Motion for Entry of Judgment of Dissolution of Marriage (Grounds Only)," in which he mentioned the trial court's earlier finding that there were grounds for dissolution. Kenneth stated that the parties had been separated for approximately two years and had entered into a temporary joint parenting agreement. He further stated that the parties each had a "significant other," with whom they resided when they were not occupying the former marital residence during parenting time. Kenneth announced that he and his significant other had discussed marriage, and would have become engaged but for Terri's objection to the entry of a judgment of dissolution. Terri filed an answer, not a response, to this motion, in which she admitted or denied various statements in the motion paragraph by paragraph. On November 19, 2002, the trial court held a hearing on Kenneth's motion, and on its own motion continued the case. A month later, that hearing resumed. The trial court denied Kenneth's motion on December 18, 2002.

¶ 6 On March 17, 2003, the trial court entered a family law pretrial order, which set discovery cutoffs and scheduled a hearing on ancillary issues after six months. On September 3, 2003, Kenneth filed a second motion for the entry of a dissolution judgment on grounds only. The second motion was similar to the first motion. Kenneth reiterated the trial court's finding that there were grounds for dissolution on March 26, 2001. He stated that the parties' parenting agreement was tendered to the court, and the court had determined that the agreement was in the children's best interest. Kenneth noted that Terri objected to the entry of a judgment of dissolution, but claimed that this case was ongoing only because of the amount of discovery her expert business evaluator had requested. On September 8, 2003, the trial court vacated its pretrial order, and on September 9, it entered an amended pretrial order, which set new discovery cutoffs and scheduled a hearing on "all financial" issues, including the value of Kenneth's businesses and partnerships, on April 6-7, 2004. The trial court did not rule on Kenneth's motion.

¶ 7 On April 6, 2004, the trial court held a hearing on those issues.

The next day, after noting that this case had been filed in November 2000 and stating that "these parties really need to get on with their lives," the court on its own motion continued the hearing for five months, until September 2004. On August 26, 2004, the court entered an order titled, "Judgment of Dissolution of Marriage (Ancillary Matters Reserved)." In that order, the trial court simply repeated its docket entry that "irreconcilable differences have caused the irretrievable breakdown of the marriage" and that "efforts at reconciliation have failed and future attempts at reconciliation would be impracticable." The court noted that the parties agreed to reserve ancillary issues and bifurcate the proceedings.

¶ 8 The September 2004 hearing on the ancillary issues was continued, and on September 2, 2004, the trial court entered a second amended pretrial order, which again set new discovery cutoffs and scheduled a hearing on ancillary issues for January 24, 2005. On December 20, 2004, the parties filed a joint motion to continue that hearing. The trial court granted their motion and vacated that date. On April 19, 2005, the trial court ordered the case continued generally.

¶ 9 On November 4, 2005, Kenneth filed a motion in limine to establish the valuation date for marital property. Relying on a long line of Illinois cases, he argued that the valuation date should be the date of the judgment of dissolution, and any evidence regarding the value of the marital property after that date was not probative and should be excluded. On December 30, 2005, both parties filed memoranda of law regarding the valuation date. The parties disputed whether, under section 503(f), the valuation date was the date of dissolution or the date of trial on ancillary matters. The trial court took that issue under advisement.

¶ 10 On February 1, 2006, nearly two years after its written order on dissolution and nearly five years after its docket entry on dissolution, the trial court entered a written order regarding, inter alia, the valuation date. The trial court stated that section 503(f) is unambiguous. According to the court:

"It seems *** that section 503(f) is obviously designed to protect the appreciation in value of marital property (or to require a sharing of any depreciation) when there is a lengthy delay between the entry of a grounds judgment and the actual hearing on ancillary issues ***. The objective of the Act is to equitably divide marital property. That can only be done by using current values."

For support, the trial court relied on a treatise and a practice guide. See 1 H. Joseph Gitlin, Gitlin on Divorce: A Guide to Illinois Matrimonial Law § 8-13(i) (2007); Muller Davis & Jody Meyer Yazici, Illinois Practice of Family Law, at 263 (5th ed. 2002). The trial court concluded that the valuation date should be January 1, 2006. The court felt that date was within its discretion because it was "within the confines of the beginning of the ancillary proceedings and whenever the proceedings will be completed, probably later in the year."

¶ 11 The trial court's optimism was not rewarded, as the parties engaged in more discovery, and more discovery disputes. They next returned to court in August 2007 to enter a stipulation regarding termination of child support for their youngest child, who by then had reached age 18. On August 30, 2007, the trial court entered an order to that effect. The next document in the record is a notice of hearing from Terri's attorney dated March 31, 2010.*fn1 The attorneys for the parties appeared in court on May 7, 2010, and the cause was continued for a hearing on ancillary issues after six months. On October 4, 2010, Terri filed a motion to change the valuation date. She requested that the court set the date no earlier than December 31, 2009. The significance of that date is not apparent from the record, because it fell within the extended period in which the parties did not appear in court and had no hearings scheduled. The next day, Kenneth filed a motion to reconsider the valuation date. He asked that the court set the date as August 26, 2004.

¶ 12 On November 16, 2010, the trial court held a hearing on all pending motions. On December 3, 2010, the trial court ordered that the valuation date for the businesses and partnerships partially owned by Kenneth would be December 31, 2010, and the valuation date for all other marital property would be "as close as practicable to the first date of any continued ancillary hearing." On December 14, 2010, Kenneth filed a motion for a Rule 308 finding. On February 11, 2011, the court granted that motion in an oral ruling. On March 24, 2011, the court entered a written order, certifying the question regarding the appropriate valuation date.

¶ 13 The appellate court answered the certified question, holding that, under section 503(f), the appropriate valuation date in a bifurcated proceeding is the date of trial on ancillary matters. 2011 IL App (4th) 110301, ¶ 21. The appellate court rejected Kenneth's argument that the phrase "date of trial" in section 503(f) was ambiguous. According to the court,

"Section 503 does not distinguish dissolution-of-marriage proceedings that are addressed all in one trial from those addressed in multiple trials. Moreover, section 503 addresses only the disposition of property and has nothing to do with the grounds for a dissolution. Thus, the only reasonable interpretation of section 503(f) is that it is referring to the trial in which the property distribution is to be decided." Id. ¶ 11.

¶ 14 The appellate court disagreed with Kenneth that setting the valuation date after the dissolution date would yield a windfall to the spouse who did not make an effort to increase the value of marital property. The court turned to other provisions of the Dissolution Act, including section 503(b)(1), which states that the presumption of marital property does not apply to property acquired by a spouse after the date of the dissolution; section 503(c), which addresses the treatment of commingled marital and non-marital property; and section 503(d)(1), which requires the trial court to consider each party's contribution to any increase or decrease in the value of marital or non-marital property. Id. ¶ 14. According to the appellate court, "The aforementioned provisions provide a framework for the trial court to distribute the parties' property in a manner that takes into account appreciation of marital property due to post-dissolution efforts." Id.

¶ 15 The appellate court also disagreed with Kenneth's suggestion that setting the valuation date after the dissolution date would create perverse incentives:

"[U]sing any other date not connected to the trial on the issue of property distribution is more likely to produce an anomalous result. If one uses an earlier date and the assets have decreased in value, then the trial court is distributing assets that no longer exist, creating an unenforceable order. [Citation.] Moreover, if the property appreciates in value without any effort by either party, it creates a windfall to the lucky party that receives that property in the distribution. We recognize property values can change between the trial and the actual date of judgment. However, any such changes would likely be smaller than another date that was farther removed from the judgment." Id. ¶ 18.

The appellate court acknowledged that its holding disregarded "long existing case law," including In re Marriage of Rossi, 113 Ill. App. 3d 55 (1983). Id. ¶ 19. The court observed that the legislature added section 503(f) some 10 years after that case was decided. Id. The court further observed, "[I]n the current economic climate, assets are just as likely to decrease in value as to increase, and courts cannot distribute assets that no longer exist." Id.

¶ 16 Justice Appleton wrote a special concurrence, discussing the implications of the court's decision in future cases.

"Where, as apparently in this case, the parties have substantial assets and business interests, the answer to the certified question may serve to create a new level of gamesmanship in the resolution of a divorce proceeding. Given that the proper evaluation of diverse business assets is a very time-consuming process and the discovery needed to test those valuations consumes even more time, the value of the marital estate can, and likely will, change (sometimes dramatically) while this process plays out. Of course, that will require a whole new round of valuations.

Many judges will refuse to enter a 'grounds only' judgment of dissolution for this reason. However, there are some cases where the entry of a 'grounds only' judgment is necessary due to the personal circumstances of the parties. Even in a case without such special circumstances, the trial court must have the ability to determine a final valuation date to force resolution of the proceedings, as we have held here, recognizing 'as close to the trial date as practicable' is a flexible concept the trial court can use as the specifics of the case before it requires." Id. ¶¶ 25-26 (Appleton, J., specially concurring).

¶ 17 We allowed Kenneth's petition for leave to appeal. Ill. S. Ct. R. 315(a) (eff. Feb. 26, 2010).

¶ 18 ANALYSIS

¶ 19 Supreme Court Rule 308 provides for an interlocutory appeal of a non-final order that presents "a question of law as to which there is substantial ground for difference of opinion." Ill. S. Ct. R. 308(a). When the trial court finds that an answer to that question "may materially advance the ultimate termination of the litigation," the court must identify the question in writing, and the appellate court may allow an appeal. Id. Because an interlocutory appeal under Rule 308 necessarily involves a question of law, our review of the appellate court's decision in such an appeal is de novo. Barbara's Sales, Inc. v. Intel Corp., 227 Ill. 2d 45, 58 (2007).

¶ 20 Though the trial court's certified question does not mention section 503(f), the appellate court's answer focused upon that statute. Accordingly, our analysis begins with familiar principles of statutory construction. The primary aim of statutory construction is to determine the legislature's intent, beginning with the plain language of the statute. General Motors Corp. v. Pappas, 242 Ill. 2d 163, 180 (2011). When the language is clear, our task is simple: we must give it effect as it was written and enacted. When the language is ambiguous, and capable of more than one reasonable interpretation (see People ex rel. Department of Public Aid v. Smith, 212 Ill. 2d 389, 397 (2004)), our task becomes more complex. In that case, we must go beyond the statute itself and engage so-called extrinsic aids to construction. We may consider the purpose of the statute, as well as the policy concerns that led to its passage. See People v. Collins, 214 Ill. 2d 206, 214 (2005). We may also consider the statute's context, reading the provision at issue in light of the entire section in which it appears and the Act of which that section is a part. Pappas, 242 Ill. 2d at 180; People v. Jones, 214 Ill. 2d 187, 193 (2005) ("The statute should be read as a whole and construed so that no part of it is rendered meaningless or superfluous."). We turn to the statute.

¶ 21 Section 503(f) provides:

"(f) In a proceeding for dissolution of marriage or declaration of invalidity of marriage or in a proceeding for disposition of property following dissolution of marriage by a court that lacked personal jurisdiction over the absent spouse or lacked jurisdiction to dispose of the property, the court, in determining the value of the marital and non-marital property for purposes of dividing the property, shall value the property as of the date of trial or some other date as close to the date of trial as is practicable." 750 ILCS 5/503(f) (West 2010).

Thus, in any dissolution proceeding the valuation date for marital property is the date of trial or another date near it.

¶ 22 Kenneth argues that the phrase "the date of trial" is ambiguous.

According to Kenneth, when dissolution proceedings have been bifurcated under section 401(b) of the Act (see 750 ILCS 5/401(b) (West 2010)), there are two trials-a trial on grounds for dissolution and a later trial on any reserved ancillary issues. As Kenneth notes, the trial court made a docket entry dissolving the parties' marriage on March 26, 2001, entered a written order to that effect on August 26, 2004, and conducted various hearings on other matters throughout the past 12 years. Kenneth asserts that any of these dates could be the date of trial under section 503(f). Terri responds that "the date of trial" is not ambiguous because section 503(f) is part of section 503, which concerns "Disposition of property." Thus, Terri asserts, the date of trial is the date of trial on property disposition.

¶ 23 Because the Act does not define the term "trial," we may consult a dictionary to reveal its plain meaning. People v. Perry, 224 Ill. 2d 312, 330 (2007). The term "trial" means "the formal examination of the matter in issue in a cause before a competent tribunal for the purpose of determining such issue." Webster's Third New International Dictionary 2439 (1993). A trial includes "all proceedings from the time when the parties are called to try their cases in court or from the time when issue is joined to the time of its final determination." Id. That is, a trial includes a hearing or hearings, as well as a decision. See Black's Law Dictionary 1644 (9th ed. 2009) (defining a trial as "[a] formal judicial examination of evidence and determination of legal claims in an adversary proceeding"). Indeed, in In re Marriage of Cohn, 93 Ill. 2d 190, 198 (1982), we described a bifurcated proceeding as one in which there is "a judgment of dissolution of marriage that reserves the remaining issues for later trial." Here, the hearing on grounds for dissolution, the trial court's written judgment of dissolution several years later, and all the hearings on ancillary matters seem to satisfy that definition. Section 503(f), however, uses the definite article "the" to denote a single date. We must decide which date the legislature intended.

¶ 24 Since section 503(f) was enacted in 1992, only the appellate court here has held that in a bifurcated proceeding the valuation date under the statute is the date of trial on property distribution. 2011 IL App (4th) 110301, ¶ 21. Our appellate court has otherwise held that in a bifurcated proceeding the valuation date is the date of dissolution. See In re Marriage of Awan, 388 Ill. App. 3d 204, 209 (2009); In re Marriage of Cutler, 334 Ill. App. 3d 731, 737 (2002) ("The Illinois Marriage and Dissolution of Marriage Act clearly stipulates that all marital assets must be valued as of the date of the dissolution of the marriage."). Awan and Cutler are part of a long and consistent line of cases, beginning with Rossi, that have reached that conclusion. See Rossi, 113 Ill. App. 3d at 60; In re Marriage of Brooks, 138 Ill. App. 3d 252, 260 (1985); In re Marriage of Rubinstein, 145 Ill. App. 3d 31, 35 (1986); In re Marriage of Stone, 155 Ill. App. 3d 62, 72 (1987); In re Marriage of Pittman, 212 Ill. App. 3d 99, 103 (1991); In re Marriage of Morrical, 216 Ill. App. 3d 643, 645 (1991); In re Marriage of Hagshenas, 234 Ill. App. 3d 178, 192 (1992); In re Marriage of Weiler, 258 Ill. App. 3d 454, 460-61 (1994). The rule in these cases mirrors the rule in other cases involving nonbifurcated proceedings. See In re Marriage of Frazier, 125 Ill. App. 3d 473, 476 (1984); In re Marriage of Suarez, 148 Ill. App. 3d 849, 859 (1986); In re Marriage of Courtright, 155 Ill. App. 3d 55, 59 (1987); In re Marriage of Jones, 187 Ill. App. 3d 206, 217 (1989); In re Marriage of Phillips, 229 Ill. App. 3d 809, 822 (1992); In re Marriage of Brenner, 235 Ill. App. 3d 840, 846 (1992); In re Marriage of Claydon, 306 Ill. App. 3d 895, 900 (1999); In re Marriage of Donovan, 361 Ill. App. 3d 1059, 1964 (2005); In re Marriage of Wojcik, 362 Ill. App. 3d 144, 152 (2005); but see In re Marriage of Benkendorf, 252 Ill. App. 3d 429, 443 (1993) (holding that the trial court in a nonbifurcated proceeding did not abuse its discretion in setting the valuation date on the last date of trial, rather than the date of the judgment of dissolution seven months later); In re Marriage of Asher-Goettler, 378 Ill. App. 3d 1023, 1033 (2008) (holding that the trial court in a nonbifurcated proceeding erred in setting the valuation date on the date of separation, rather than the date of trial).

¶ 25 When the statute was enacted, the legislature was aware of some of these cases. After it became effective, the legislature became aware of the others. Over the past 20 years, the General Assembly has amended section 503 at least 10 times, but has not changed section 503(f). We assume not only that the General Assembly acts with full knowledge of previous judicial decisions, but also that its silence on this issue in the face of decisions consistent with those previous decisions indicates its acquiescence to them. See People v. Villa, 2011 IL 110777, ¶ 36 ("the judicial construction of the statute becomes a part of the law, and the legislature is presumed to act with full knowledge of the prevailing case law and the judicial construction of the words in the prior enactment").

¶ 26 But the near-unanimous weight of authority is not supported simply by legislative acquiescence; it is supported by other provisions of section 503, as well as strong policy considerations inherent in the Act as a whole. The rationale of Rossi and its progeny is that once the parties are divorced, the property they acquire is no longer marital property. Section 503(a) defines non-marital property (750 ILCS 5/503(a) (West 2010)), and section 503(d) instructs the trial court to divide marital property in "just proportions" (750 ILCS 5/503(d) (West 2010)). Indeed, the purpose of section 503 is to facilitate an equitable distribution of marital property (see Kujawinski v. Kujawinski, 71 Ill. 2d 563, 573 (1978)) not non-marital property.

Accordingly, section 503(b)(1) provides that "all property acquired by either spouse after the marriage and before a judgment of dissolution *** is presumed to be marital property." (Emphasis added.) 750 ILCS 5/503(b)(1) (West 2010). A judgment of dissolution terminates the parties' marriage, but it also terminates ...


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