In re MARRIAGE OF SUSANNE MARSH, Petitioner-Appellant, and THOMAS MARSH, Respondent-Appellee.
Appeal from the Circuit Court of McHenry County No. 11-DV-1069 Honorable Mark R. Gerhardt, Judge, Presiding.
JUSTICE HUDSON delivered the judgment of the court, with opinion. Justices Birkett and Spence concurred in the judgment and opinion.
¶ 1 Petitioner, Susanne Marsh, filed a petition for a rule to show cause and for attorney fees against respondent, Thomas Marsh, claiming that respondent failed to comply with his child support obligations. The trial court denied the petition, and petitioner timely appealed. The sole issue on appeal is whether money received by respondent from the postdissolution sale of certain shares of stock that he owned prior to the dissolution constitutes "income" for purposes of child support under section 505(a)(3) of the Illinois Marriage and Dissolution of Marriage Act (the Act) (750 ILCS 5/505(a)(3) (West 2012)). We find that it does not, and thus we affirm.
¶ 2 I. BACKGROUND
¶ 3 On July 23, 2012, the 24-year marriage of petitioner and respondent was dissolved. At the time of dissolution, the parties had three children, one of whom was a minor. The judgment of dissolution incorporated the parties' marital settlement agreement (MSA). The MSA provided, inter alia, that respondent would retain ownership of "[h]is shares owned in Wisted's Supermarket." (There was an identical provision for petitioner to retain ownership of "[h]er shares owned in Wisted's Supermarket.") In addition, the MSA included the following provisions concerning child support:
"A. [Respondent] shall pay to [petitioner], as and for the support of the minor child, the sum of $731 per month commencing April 2012. [Respondent's] child support payments will be offset against [petitioner's] maintenance payments . As a result of this offset, the amount to actually be withheld from [respondent's] paycheck shall be $231 per month.
B. In addition to the specific dollar amount in paragraph one of this order, and also retroactive to include April of 2012, [respondent] shall pay 20% of all additional income, every three months, and shall provide [petitioner] income records sufficient to determine and enforce the percentage amount of such additional support."
¶ 4 On February 7, 2013, petitioner filed a petition for a rule to show cause and for attorney fees. According to the petition, on December 28, 2012, respondent received $275, 000 in income from the sale of his shares of Wisted's stock and failed to pay petitioner 20% of that income as required. Petitioner attached an affidavit, in which she averred the following:
"2. During the course of our marriage, my father gave [respondent] and me shares of stock in Wisted's Supermarket Inc.
3. The transfer of these shares to me and [respondent] was a gift and Wisted's Supermarkets, Inc. paid for all personal income tax obligations that [respondent] and I incurred as a result of our ownership of the stock. In addition, depending on the profitability of the company, [respondent] and I have received stock distributions in addition to the funds to cover taxes."
¶ 5 On March 27, 2013, respondent filed his response to the petition. According to respondent, because he sold the stock at a "loss, " he did not receive any income that would be subject to the child support provisions in the MSA. Respondent attached to his response a copy of the stock sale agreement and an affidavit from Barbara Glanz, a certified public accountant who had worked for Wisted's Supermarket, Inc., and the parties for many years. According to Glanz's affidavit, the cost basis of respondent's 131 shares of Wisted's stock through December 31, 2011, was $282, 079. She further averred the following:
"5. That said cost basis was computed utilizing the cost basis of the stock at the time it was gifted to [respondent] and then adjusting the basis yearly by the amount of net income or loss distributions of Wisted's Supermarket, Inc. ([p]roportionate to the number of shares owned by [respondent] in relation to the total number outstanding) since the date of the gift and through December 31, 2011.
6. That the 2012 tax return for Wisted's Supermarket, Inc. has not yet been completed, but based on my review of preliminary reports, there will be additional income for the year 2012. If that, in fact, is the case, then ...