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In re Marriage of Omalley

Court of Appeals of Illinois, First District, Fifth Division

September 23, 2016

In re MARRIAGE OF KIM MATSON O'MALLEY, n/k/a/ Kim Godfrey, Petitioner-Appellee, and PAUL R. O'MALLEY, Respondent-Appellant.

         Appeal from the Circuit Court of Cook County. No. 01 D 14530 The Honorable Patricia Logue, Judge Presiding.

          PRESIDING JUSTICE GORDON delivered the judgment of the court, with opinion. Justices Reyes and Burke concurred in the judgment and opinion.

          OPINION

          GORDON PRESIDING JUSTICE.

         ¶ 1 Petitioner Kim Godfrey filed a petition to dissolve her marriage to respondent Paul R. O'Malley, and the trial court entered a judgment dissolving the marriage, which incorporated a marital settlement agreement (MSA) signed by the parties. After the entry of the judgment for dissolution of marriage, the parties continued to litigate the terms of the MSA, including the terms related to the disposition of the former marital residence. While two appeals concerning the MSA have been before this court, the instant appeal concerns the trial court finding Paul in "indirect civil contempt" for failing to abide by the MSA's September 1, 2007, deadline for selling the marital residence or buying out Kim's interest in the residence and its orders concerning the distribution of the proceeds from the sale of the residence and awarding Kim attorney fees. For the reasons set forth below, we affirm in part and vacate in part the trial court's order.

         ¶ 2 BACKGROUND

         ¶ 3 Kim Godfrey and Paul O'Malley were married on November 18, 1983.[1] In 2001, Kim filed a petition for dissolution of marriage, alleging irreconcilable differences as the reason for the dissolution. Kim and Paul executed a MSA on July 16, 2003, which contained, inter alia, a provision concerning the marital residence, a single family home located in Oak Park, Illinois. The trial court entered a judgment for dissolution of the marriage on the same day, which incorporated the MSA. The provision concerning the marital residence stated the following:

"Paul and Kim will retain title and interest in Oak Park Marital real estate *** as tenants in common while PAUL maintains possession exclusive of KIM; PAUL will either place the Oak Park home for sale on or before September 1, 2007, or buy out Kim's interest. In the event that PAUL elects to buy out KIM's interest-or the home is listed for sale-the parties will each have the right to obtain separate SRA appraisals to determine the then current average market sale price. If the first two (2) separate appraisals are not more than $100, 000 apart, either party may elect to have the first two (2) appraisers designated a 3rd SRA appraiser to submit an independent appraisal, and in that event, the current average market sale price shall be determined by averaging the two (2) highest appraisals obtained. Cost of an appraisal shall be borne by the party requesting an appraisal. Kim will receive on sale or buy out by PAUL, as set forth below:
(1)If the Oak Park marital home is sold to third party(ies), KIM will receive 50% of the net sale proceeds or at least $550, 000, whichever is greater, after deduction from the gross sale proceeds of any realtor or sales commission, closing costs and for $250, 000 representing the mortgage and home equity debt and any credit due PAUL as stated herein. PAUL must have paid all expenses due on the property prior to sale including all payments due on mortgages, home equity loans, liens, taxes, insurance and utilities, and any such unpaid obligations will be deducted from PAUL's share of the equity realized from the sale of the residence. PAUL will receive a credit for costs paid by him, not to exceed $100, 000, for special maintenance, preservation or improvement of the marital home, necessary to maintain full market value. Costs so incurred by PAUL shall require written documentation of work for costs and require pre-approval by KIM before work takes place for PAUL to obtain a credit sale at closing.
(2) If PAUL elects to buy out Kim's interest in the Oak Park marital home, Kim will receive 50% of the then current average market sale price, determined as stated in paragraph IC herein, or at least $550, 000, whichever is greater, after deduction for $250, 000, representing the mortgage and home equity debt and any credit due PAUL as stated herein. PAUL will receive a credit for costs paid by him, not to exceed $100, 000, for special maintenance, preservation, or improvement of the marital home necessary to maintain full market value. Costs so incurred by PAUL shall require written documentation of work and costs and require pre-approval by KIM before work takes place for PAUL to obtain a credit a buyout closing."

         ¶ 4 Thus, while Paul maintained exclusive possession of the marital residence, the property was owned by Paul and Kim as tenants in common until either (1) Paul bought out Kim's half of the property or (2) the property was placed for sale with Paul and Kim splitting any resulting proceeds. If the property was to be sold, the property was to be listed for sale on or before September 1, 2007.

         ¶ 5 I. Kim's Petition for Rule to Show Cause

         ¶ 6 On November 16, 2009, prior to the May 2012 sale of the marital residence, Kim filed a "Petition for Rule to Show Cause, to Modify Judgment for Dissolution of Marriage, and other Relief." In count I of the petition, Kim alleged that after the judgment for dissolution of marriage was entered, Paul was unconcerned about the MSA's September 1, 2007, deadline for putting up the marital residence for sale and that he made no efforts to arrange for the necessary repairs that were needed prior to placing the residence on the market. Kim alleged that Paul minimally participated in the repair and renovation process. Kim alleged Paul's exclusive possession of the home and his minimal participation caused a delay in putting the marital residence on the market, which was ultimately done in 2008. Paul and Kim received an offer in August 2008 of $1.775 million, but Kim alleged that Paul felt that was a low offer and began to engage in negotiations with the prospective buyers. The final offer of $1.875 million was received on September 17, 2008, and contained an expiration time of 9 p.m. Kim alleges that she signed the contract that day and expected Paul to do so as well. Paul allegedly disregarded the 9 p.m. deadline, and the strict instructions that the final offer was not subject to a counteroffer, and submitted a counteroffer anyway. The petition alleges that Paul and Kim's realtor for the marital residence contacted Kim to tell her that the prospective buyers had walked away from the deal because Paul submitted a counteroffer instead of a signed contract. According to the petition, the deal would have entitled Kim to a net of over $750, 000 for her half of the sale. After the sale fell through, Kim allegedly had a large amount of debt that she was unable to pay due to the lost sale of the marital residence. The petition alleges that Paul's uncooperative and unmotivated behavior resulted in the failure of the completed sale on the home and that his obligations from the judgment of dissolution of marriage were clear and his failure to comply with those terms were even clearer.

         ¶ 7 The second count, modification of the judgment, asked the court to modify the judgment of dissolution of marriage to grant Kim exclusive possession of the residence so that Kim could attempt to maximize the profits from the sale of the residence. The petition sought the following relief:

"(1) Enter an order requiring Respondent PAUL O'MALLEY to show cause, if any he can, for his failure to comply with the Judgment for Dissolution of Marriage; (2) find Respondent in contempt of this Court for his failure to abide by the terms of the Judgment for Dissolution of Marriage; (3) [o]rder Respondent immediately to pay Petitioner the sum of $767, 500, representing Kim's share of the proceeds of the lost sale of the Residence, which sale was lost as a direct result of Respondent's contemptuous action; (4) [o]rder Respondent to be fully responsible for all improvement and maintenance cost incurred since the date the sale was to be closed, with no contribution from Kim; (5) [o]rder Respondent to tender Kim a sum equal to her additional costs incurred that are directly related to Respondent's failure to close the sale; (6) [o]rder Respondent to pay Petitioner's attorney fees and costs associated with prosecuting this [p]etition; (7) [g]rant such other and further relief as this Court may deem just and equitable under the facts of this case; *** (8) [m]odify the Judgment for Dissolution of Marriage to terminate Respondent's exclusive possession of the [r]esidence effective immediately; (9) [m]odify the Judgment for Dissolution of Marriage to name Petitioner as sole negotiator on any contracts for the sale of the [r]esidence; (10) [a]llow Petitioner sole right to select and contract with whatever realtor she may deem appropriate; and (11) [g]rant such other and further relief as this Court may deem just and equitable under the facts and circumstances of this case."

         ¶ 8 On December 10, 2009, Paul responded to the petition, denying the allegation that he interfered with the sale. On January 5, 2012, the trial court found that Kim alleged a prima facie case of indirect civil contempt and issued an order for Paul to show cause why he should not be held in contempt of court for failing to comply with the terms of the judgment for dissolution of marriage.[2]

         ¶ 9 Trial on the petition was set for March 13, 2012, but ultimately did not commence until September 2013. On March 12, 2012, Paul filed a motion for summary judgment arguing that there was no evidence to support a finding that he was in contempt for noncompliance, but his motion was denied. The marital residence was ultimately sold on May 18, 2012, for $1.5 million, before the trial court could rule on Kim's petition. On May 29, 2012, the trial court ordered that " '[a]ny and all proceeds of sale of [the] former marital residence shall be held in escrow, ' " and Paul and Kim were ordered to execute the necessary documentation to establish that escrow account. In re Marriage of O'Malley, 2013 IL App (1st) 131641-U, ¶ 6. Paul filed a motion to vacate this order on June 25, 2012, arguing that it was a preliminary injunction. The trial court denied the motion on July 2, 2012, and we dismissed Paul's appeal for lack of jurisdiction. O'Malley, 2013 IL App (1st) 131641-U, ¶ 26.

         ¶ 10 II. Contempt Trial

         ¶ 11 The trial on Kim's petition for rule to show cause commenced in September 2013, and both parties called witnesses to testify on their behalf. Paul testified on his own behalf, while Kim presented the testimony of (1) Catherine Deam, Kim and Paul's real estate agent for the marital residence; (2) Robert Polachek, Paul's previous attorney; (3) Barbara Binik, the 2008 prospective buyers' realtor; and (4) herself. Since Paul does not challenge the trial court's findings of fact, we relate here only the facts needed to understand the issues on appeal.

         ¶ 12 Deam testified[3] that she was chosen as Paul and Kim's realtor to sell the marital residence, which was placed on the market later than the September 1, 2007, date specified in the MSA due to the staging of the marital residence, maintenance completed on the property, and the selection process of choosing a realtor that Paul and Kim both agreed upon; Deam explained that the marital residence was considered a historic home, as it was built by the architects Tallmadge and Watson, and she had experience in selling historic homes similar to the marital residence. The residence was eventually placed on the market in April 2008 for $2.3 million, and Deam received an offer from prospective buyers for $1.775 million.

         ¶ 13 Robert Polachek testified that after Paul received the offer from the prospective buyers, Paul asked Polachek to seek a modification of the final offer with respect to the closing date and radon mitigation costs. Polachek testified that an e-mail with a counteroffer regarding the closing date and the radon costs was sent at 6:39 p.m. on September 17, 2008. Polachek also testified that the prospective buyers did not respond and the sale was subsequently terminated.

         ¶ 14 Barbara Binik, the prospective buyers' realtor, testified that on September 17, 2008, around 12:48 p.m., she sent Deam a fax on behalf of her clients with a new offer. She additionally testified that this new offer was to be terminated at 9 p.m. that evening.

         ¶ 15 At trial, Kim testified that she and Paul agreed to use Deam as their realtor because she and Paul felt that the property's historic status required a certain level of experience and they believed Deam was qualified to sell the marital residence. Kim testified that on August 11, 2008, Kim and Paul received an offer on the property, and that through a series of negotiations, both parties agreed upon a price of $1.875 million for the marital property. The prospective buyers imposed a 9 p.m. deadline on their final offer. Kim testified that she signed the final offer prior to this deadline, but Paul did not. Kim testified that she became aware of the incomplete sale on September 22, 2008.

         ¶ 16 Prior to the prospective buyers' final offer, Paul testified that he had the financial ability to buy out Kim's interest in the marital residence but chose not to buy out her interest because it was not in his financial best interest to do so. In regards to the prospective buyers' final offer, Paul testified at trial that he told his attorney to e-mail the prospective buyers and seek a modification on the final offer. Paul testified that after the prospective buyers' final offer terminated, the price of the marital residence was reduced over the years, and the final asking price was reduced to $1.59 million in 2012. The property sold in May 2012 for $1.5 million.

         ¶ 17 III. Contempt Order

         ¶ 18 On April 2, 2014, the trial court found Paul to be in "indirect civil contempt" and ordered Paul to pay an amount equal to half of the 2008 final offer of $1.875 million. Additionally, the trial court found Kim, Polachek, and Binik to be credible witnesses and ...


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