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In re Marriage of Earlywine

Supreme Court of Illinois

October 3, 2013

In re MARRIAGE OF JOHN J. EARLYWINE, Petitioner, and JESSICA A. EARLYWINE, Respondent (Thomas H. James, Contemnor-Appellant).

JUSTICE BURKE delivered the judgment of the court, with opinion. Chief Justice Kilbride and Justices Freeman, Thomas, Garman, Karmeier, and Theis concurred in the judgment and opinion.



¶ 1 In the course of dissolution of marriage proceedings, respondent, Jessica A. Earlywine, filed a petition for interim attorney fees pursuant to the "leveling of the playing field" provisions in the Illinois Marriage and Dissolution of Marriage Act (Act). See 750 ILCS 5/501(c-1) (West 2010). The circuit court of Stephenson County found that neither respondent nor petitioner, John J. Earlywine, had the financial ability or resources to pay their respective attorney fees and costs. Pursuant to section 501(c-1)(3) of the Act, the court ordered petitioner's attorney, Thomas James, to turn over, or disgorge, to respondent's attorney half the fees previously paid to him. The court held James in "friendly" contempt at his request so that he could appeal the turnover order. On appeal, James argued that the fees were not subject to disgorgement because they were held in an advance payment retainer and became his property upon payment. The appellate court rejected James' argument, affirmed the turnover order, and vacated the order of contempt. 2012 IL App (2d) 110730. We now affirm the appellate court.

¶ 2 Background

¶ 3 Petitioner filed his petition for dissolution of marriage on August 24, 2010. The parties had one son born of the marriage who was three years old at the time of filing. On November 1, 2010, respondent, through her attorney Richard Haime, filed a petition requesting interim attorney fees in the amount of $5, 000. Respondent asked the court to order petitioner to pay her fees or to order disgorgement of fees previously paid to petitioner's attorney. In her affidavit accompanying the petition, respondent stated that she was unemployed and had no assets or cash to pay her attorney fees. In response, petitioner stated that he had been unemployed for some time, had no money to retain counsel, and that his parents had paid his legal bills.

¶ 4 Both parties submitted financial disclosure affidavits. Respondent stated that she had earned $300 from employment in 2010 and owed $4, 600 on a car. Petitioner stated that he was employed sporadically and had received some unemployment payments. Petitioner listed debts totaling more than $66, 000. He stated further that he owed his parents $8, 750 for legal fees paid to his attorney on his behalf.

¶ 5 Following a hearing, the trial court issued a memorandum opinion and order on April 26, 2011. The court found that there were substantial debts from the marriage which neither party was able to pay. The court further found that respondent's requested interim fees were reasonable due to the anticipated complexity of the case, including a custody evaluation. Pursuant to section 501(c-1)(3) of the Act, the court found that neither party had the financial ability or access to assets or income to pay their respective attorney fees, nor was petitioner able to pay any of respondent's fees. Accordingly, the court ordered James to turn over to Haime a portion of the fees paid to him by petitioner's parents, in the amount of $4, 000.

¶ 6 Petitioner filed a motion to reconsider the disgorgement order, arguing that because the attorney fees were placed in an advance payment retainer, they were not subject to a disgorgement order by the trial court. Attached to the motion was a copy of the attorney-client agreement between James and petitioner, which indicates that petitioner agreed that all fees paid to James would be considered an advance payment retainer, as that term is used in Dowling v. Chicago Options Associates, Inc., 226 Ill.2d 277 (2007). The agreement sets forth the requirements of the advance payment retainer in compliance with Rule 1.15 of the Illinois Rules of Professional Conduct of 2010 (eff. Jan. 1, 2010). Relevant to this appeal, the agreement identifies the "special purpose" for the advance payment retainer as follows:

"(1) the special purpose for the advance payment retainer and an explanation why it is advantageous to the client: In the case of family law with obligors or putative obligors, regardless of the source of obligation, the [Illinois Marriage and Dissolution of Marriage Act] can cause a court order to issue which will divide attorney retention funds which are held in an attorney's trust account because such funds are owned by the client and thus are part of the marital estate. This division or allocation is in a judge's discretion that provides the authority to allocate all of said funds should such facts portend such a result. The use of the 'advance payment retainer' avoids the problem of having to pay your counsel twice due to a fee allocation order albeit a Court may still order such a payment from the client directly. The benefit of the advanced payment retainer is that it avoids what can at times be the financial adversity with the attorney which you have hired due to a fee allocation order's mandating allocation from an attorney's trust account to the party on the other side of the lawsuit."

¶ 7 In support of the motion to reconsider, petitioner's mother, Joyce M. Earlywine, submitted an affidavit stating that she, her fiancé, petitioner's father, and petitioner's father's wife had paid all of the attorney fees to petitioner's attorney on his behalf.

¶ 8 The trial court issued a memorandum opinion and order on May 25, 2011, denying the motion to reconsider the turnover order. The court made the following findings:

"The stated policy of 501(c-1)(3) is to achieve 'substantial parity between the parties.' That section further expressly designates 'retainers *** previously paid' as a source for disgorgement ***. Public policy allowing divorce litigants to participate equally should override the advance payment retainer device of protecting the fees of one side. To allow John to shelter the fees paid on his behalf as an advance payment retainer defeats the purpose of the 'substantial parity' provisions of the Illinois Marriage and Dissolution of Marriage Act. Divorce court is a court of equity, in which the court has a substantial amount of discretion . This court does not find that the findings of Dowling, as cited by John, apply or were meant to apply to divorce cases."

¶ 9 James filed a motion for an entry of friendly contempt in connection with the fee disgorgement order. On June 21, 2011, the trial court granted the motion and fined James $50. James subsequently filed his notice of appeal.

¶ 10 The appellate court affirmed the trial court's turnover order and vacated the contempt order. 2012 IL App (2d) 110730. The court held that the plain language of section 501(c-1)(3) of the Act allows a trial court to order disgorgement of retainers previously paid to an attorney in the event that the court finds that both parties lack the financial ability and resources to pay reasonable attorney fees and costs. Id. ¶¶ 19-21. The legislature's use of the general term "retainers, " in the court's opinion, encompassed an advance payment retainer. Id. ΒΆ 21. The court further held that allowing a party to avoid disgorgement through use ...

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