Court of Appeal of Illinois, First District, Fifth Division
In re MARRIAGE OF Sonal PATEL, Petitioner-Appellee and Vipul Patel, Respondent-Appellant.
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Paul J. Bargiel, P.C., of Chicago (Paul J. Bargiel, of counsel), for appellant.
Beerman Pritikin Mirabelli Swerdlove LLP, of Chicago (Enrico J. Mirabelli and Amy L. Jonaitis, of counsel), for appellee.
[376 Ill.Dec. 40] ¶ 1 Petitioner Sonal Patel and respondent Vipul Patel are engaged in dissolution of marriage proceedings in the circuit court of Cook County. Respondent appeals from an order of the circuit court ordering him to pay petitioner's interim attorney fees and from the court's subsequent order finding him in indirect civil contempt and imposing sanctions for his failure to comply with the order to pay the attorney fees. Respondent argues that the court (1) abused its discretion in awarding interim fees to petitioner because the record fails to demonstrate that respondent had the ability to pay petitioner's fees and petitioner was unable to do so; and (2) lacked jurisdiction to award petitioner $69,000 in interim fees when her petition requested only $51,040 in interim fees. He requests that we reverse the order awarding interim attorney fees and the court's orders finding him in contempt and imposing sanctions for his failure to comply with that underlying order. We affirm.
¶ 2 BACKGROUND
¶ 3 The parties married in November 1999 and two children were born to the marriage. On January 28, 2010, petitioner filed a petition for dissolution of marriage. On April 13, 2010, respondent filed a counterpetition for dissolution of marriage. On October 12, 2010, petitioner filed a petition for interim attorney fees and costs (first petition) pursuant to sections 508 and 501(c-1) of the Illinois Marriage and Dissolution of Marriage Act (the Act) (750 ILCS 5/508, 501(c-1) (West 2010)).
¶ 4 Pursuant to section 508 of the Act, " [i]nterim attorney's fees and costs may be awarded from the opposing party, in a pre-judgment dissolution proceeding in accordance with subsection (c-1) of Section 501." 750 ILCS 5/508 (West 2010). Section 501(c-1) provides that the trial court may assess attorney fees and costs in favor of the petitioning party's counsel while the case is still pending. 750 ILCS 5/501(c-1) (West 2010). " Except for good cause shown, a proceeding for (or relating to) interim attorney's fees and costs in a pre-judgment dissolution proceeding shall be nonevidentiary and summary in nature." 750 ILCS 5/501(c-1)(1) (West 2010). Section 501(c-1)(3) provides that the court
" shall assess an interim award against an opposing party in an amount necessary to enable the petitioning party to participate adequately in the litigation, upon findings that the party from whom attorney's fees and costs are sought has the financial ability to pay reasonable amounts and that the party seeking attorney's fees and costs lacks sufficient access to assets or income to pay reasonable amounts." 750 ILCS 5/501(c-1)(3) (West 2010).
[376 Ill.Dec. 41] ¶ 5 Petitioner asserted that her financial resources were insufficient to pay the attorney fees and costs necessary to be adequately represented in the matter. She claimed that she had paid her attorneys $7,400 but owed them in excess of $4,000. She asserted that respondent had access to substantial funds, was possessed of substantial assets and received financial assistance from his extended family. Petitioner also asserted that respondent had control of $40,000 of marital funds in a checking account, $400,000 in a nonmarital Ameritrade account and in excess of $300,000 in a nonmarital Ameritrade Roth account. She claimed that she was without adequate funds with which to pay attorney fees and costs and requested the court to award her interim attorney fees.
¶ 6 In support of her petition, petitioner attached her signed and notarized affidavit in which she stated that she " lack[ed] sufficient income to pay reasonable attorneys' fees and costs" and respondent was " a high net worth individual who [was] more than capable of paying for" her attorney fees and costs. She also attached her attorney's affidavit, in which he stated that petitioner owed in excess of $4,000 to his law firm and that, based on the complexity of the case, he anticipated that substantial additional time would be spent on the matter.
¶ 7 Respondent filed a response, claiming that petitioner's petition failed to sufficiently allege facts necessary to support an interim attorney fee petition under section 501(c-1). Respondent claimed that petitioner's annual income was at least $113,500, his annual income was approximately $48,000 and petitioner had access to assorted marital assets, including her $86,557 investment account and a $25,000 Roth individual retirement account (IRA). He stated that, since February 2010, petitioner had not contributed to the parties' joint expenses including mortgages, real estate taxes, rent and utilities for the former marital home and that respondent had been solely responsible for payment of the joint expenses. Respondent claimed that petitioner had sufficient income and access to marital assets from which to pay her own attorney fees and respondent did not have sufficient income and access to marital assets from which he could pay petitioner's fees.
¶ 8 On November 4, 2010, following a nonevidentiary hearing, the court denied petitioner's petition, finding that " the parties lack sufficient marital funds sufficient [ sic ] for an interim fee award" and " [petitioner] has a present ability to pay."
¶ 9 On March 19, 2012, petitioner filed a petition for interim and prospective attorney fees and costs (second petition) pursuant to sections 501(c-1) and 508. She asserted that she had paid her attorneys $26,931 and, as of February 29, 2012, owed them $21,040. Petitioner claimed that, although she was employed, her income was consumed by ongoing expenses, her cash resources were limited and her financial resources were " insufficient to enable her to continue to participate in these proceedings in any meaningful way without contribution from respondent for her reasonable attorney's fees and costs." She asserted that respondent was " in possession and control of substantial liquid and non-liquid assets" and had " interests in non-liquid assets such as retirement and investment accounts."
¶ 10 Petitioner asserted that she had " completely liquidated her retirement account in order to pay attorney's fees and costs * * * and to pay other expenses." She stated that she was " entitled to an interim award of not less than $21,040 payable to her attorneys for reasonable fees and costs" and " a prospective award of not less than $30,000 payable to her [376 Ill.Dec. 42]
attorneys for reasonable fees and costs." She asserted that " this amount is necessary to enable [her] to continue to participate adequately in this litigation" and, if not afforded this ability, her rights would be severely prejudiced. Petitioner requested that the court order respondent to pay interim attorney fees and costs " in the total amount of for [ sic ] past due fees of $21,040 as of February 29, 2012[,] plus $30,000 for prospective fees" and for such other relief as the court deemed equitable and just. Petitioner's second petition was signed by her attorney.
¶ 11 In support of her second petition, petitioner attached the retainer agreement she had executed with her attorney, her affidavit and her attorney's affidavit. In petitioner's affidavit, which was unsigned, she stated that her financial resources were insufficient to enable her to participate in the proceedings in a meaningful way, she had depleted her retirement account and had no other way to pay the costs and fees associated with the litigation. She stated that she had paid her attorneys $26,931 to date and, as of February 29, 2012, had an outstanding invoice of $21,040. She stated that all facts in the accompanying petition were true and correct.
¶ 12 In her attorney's affidavit, which was signed and notarized, he stated that petitioner " is currently without sufficient income or assets to pay attorney's fees and costs" incurred in the case. He also stated that respondent " possesses a superior financial ability to pay [petitioner's] interim attorney's fees and costs and prospective fees and should be ordered to pay the same so that petitioner may participate in this litigation."
¶ 13 In respondent's response to the second petition, he asserted that the second petition should be denied because the petition failed to prove petitioner's inability to pay and his ability to pay the parties' reasonable attorney fees as required by section 501(c-1). Respondent asserted that petitioner failed to attach to her petition an affidavit delineating her inability to pay fees and respondent's ability to pay. He also pointed out that petitioner's second petition was neither verified nor signed by her. Respondent further asserted that the petition should be denied because the court had previously denied petitioner's first fee petition and made findings that the parties lacked sufficient marital funds for an interim fee award and that petitioner had the present ability to pay her own attorney fees. Respondent lastly argued that the petition should be denied because it was not brought in good faith where petitioner earned more than double respondent's salary, did not contribute to the parties' household or investment expenses, had bought a Range Rover automobile, had incurred large credit card bills, had just returned from a two-week vacation to India with the couple's children and had the present ability to pay for her attorney fees. Respondent requested that the court deny petitioner's second petition or set a good cause hearing.
¶ 14 The court held a nonevidentiary hearing on the second petition on April 12, 2012. During the hearing, petitioner's counsel directed the court to the current and previous financial disclosure statements filed by the parties in the dissolution action pursuant to Cook County Local Rule 13.3.1 (Cook Co. Cir. Ct. R. (eff. June 1, 2011)). He told the court that respondent had 1,750 shares of Apple stock, valued at $1,090,250. He argued the stock was " liquid" and, although respondent's counsel claimed the stock was nonmarital, which petitioner neither admitted nor denied, " under 501(c), you can use nonmarital assets for the payment of * * * legal fees."
[376 Ill.Dec. 43] ¶ 15 Petitioner's counsel admitted that petitioner earned over $100,000 per year but asserted that she had a shortfall at the end of the month. He stated she had no assets left, except for a 401 K account from which she had already borrowed $50,000 and could not borrow any more, and received no child support or maintenance. Counsel argued that petitioner's financial position was different than when she filed her first petition for interim attorney fees in October 2010. Since then, she had exhausted her money and lived month to month. Counsel argued that the court should level the playing field between the parties because respondent had the ability to pay the fees. He asserted that, as of three weeks before, respondent had over $1 million in liquid assets that could be used to pay the fees. In contrast, as petitioner stated in her affidavit, she had no money or assets to pay the attorney fees.
¶ 16 Respondent's counsel responded that petitioner was trying to get a second bite at the apple after the court had denied her first petition for interim attorney fees. She argued that petitioner was asking the court to reverse its previous findings that the parties' lacked sufficient marital assets from which to pay attorney fees and petitioner had the present ability to pay her fees.
¶ 17 Respondent's counsel argued that petitioner had failed to establish both her inability to pay and respondent's ability to pay attorney fees in the affidavits or in any other documents. Referring to the Rule 13.3.1 financial disclosure statements, counsel argued that petitioner earned more than double the salary that respondent earned. She also argued that section 501(c) specifically provides for advances from the marital estate, not the nonmarital estate. Counsel further asserted that half of the money referred to by petitioner's counsel was in a Roth IRA account and the court had no authority to order liquidation of a Roth IRA. She also claimed that the other half of the money was " tied up into securities and is heavily margined and mortgaged," the court had no authority to order liquidation of these assets either and to order such liquidation would deplete the only asset respondent had. Counsel asserted that respondent had been scraping funds together to contribute to the maintenance of the parties' two investment properties and petitioner had not contributed anything to these properties, which were in danger of foreclosure.
¶ 18 Respondent's counsel also asked the court " to note" that petitioner's second petition was legally insufficient. She pointed out that the petition was neither verified nor signed by petitioner and that counsel had yet to receive a signed and verified copy of the petition. She had that day received a facsimile transmission of an unnotarized verification page and a signed affidavit. Counsel asserted that the court should strike the request for fees because the petition was improperly pled and petitioner's counsel had no good-faith basis for filing the petition, having filed it simply to harass respondent's counsel and find out how much respondent had paid his counsel.
¶ 19 Petitioner's counsel responded, asserting:
" [T]o the extent that it [unclear whether counsel was referring to the petition or petitioner's affidavit] wasn't signed, that it [ sic ] was inadvertent, my client is standing next to me. Now we did have it signed earlier today. We did send it over. Nothing has changed factually. My client will testify under oath that these are the right facts; this is her affidavit. And only through inadvertence we didn't send over the signed [376 Ill.Dec. 44]
copy. * * * That's sort of a technical thing that we have already corrected."
With regard to respondent's assertion that petitioner's pleading was deficient, counsel asserted that respondent had not filed a motion to strike and instead had filed a response.
¶ 20 Petitioner's counsel argued that nothing in the statute barred a party from filing a second petition for interim attorney fees. He claimed that petitioner's fees had increased from $7,400 to $56,000 over the two years of litigation since the court had found petitioner had a present ability to pay in October 2010. Counsel asserted that respondent's counsel did not explain the source of respondent's ...