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In re Marriage of Lugge

Court of Appeals of Illinois, Fifth District

January 15, 2020

In re MARRIAGE OF CHRISTY LUGGE, Petitioner-Appellant, and JAMES LUGGE, Respondent-Appellee.

          Rule 23 Order Filed: December 23, 2019

          Motion to Publish Granted: January 15, 2020

          Appeal from the Circuit Court of St. Clair County.No. 13-D-912 Honorable Thomas B. Cannady, Judge, presiding.

          Attorney for Appellant Curtis L. Blood

          Attorneys for Appellee Janyi D. Lintvedt, Charles W. Courtney Jr.

          JUSTICE OVERSTREET delivered the judgment of the court, with opinion. Presiding Justice Welch and Justice Moore concurred in the judgment and opinion.

          OPINION

          OVERSTREET JUSTICE

         ¶ 1 During the dissolution of marriage proceedings below, the petitioner, Christy Lugge, and the respondent, James Lugge, entered into a marital settlement agreement to divide marital assets, and the circuit court heard evidence on the remaining issues, including child support and maintenance. On appeal, Christy alleges that in determining child support and maintenance, the circuit court improperly considered income generated from cash awarded her pursuant to the marital settlement agreement. Christy requests this court to reverse and remand to recalculate income for purposes of child support and maintenance. We affirm the decision of the circuit court.

         ¶ 2 I. BACKGROUND

         ¶ 3 The parties married on February 14, 1987, and four children were born of the marriage. On November 22, 2013, Christy filed a petition for dissolution of marriage. On October 17, 2018, the circuit court entered an order noting the parties' partial agreement with regard to distribution of the marital property. The circuit court attached to its order a property division report, which revealed that the parties had agreed to a property settlement allocating approximately $3 million to each party, accounting for a $471, 500 equalization payment from James to Christy.

         ¶ 4 Pursuant to the agreed property division, James received real estate with equity totaling $915, 000; cash and investments totaling $51, 053; interest in Bel-O Sales and Service, Inc. (Bel-O Sales) valued at $2, 102, 750; interest in Bel-O Pest Solutions, Inc. (Bel-O Pest) valued at $175, 000; a cell tower lease valued at $7000; cars and personal effects valued at $26, 100; life insurance valued at $54, 009; retirement accounts valued at $381, 515; and debts totaling $233, 865. Pursuant to the agreed property division, Christy received real estate with equity totaling $1, 041, 130; cash and investments totaling $818, 442; cars and personal effects valued at $66, 000; life insurance valued at $168, 161; and retirement accounts valued at $442, 072.

         ¶ 5 On October 18, 2018, at the hearing on the remaining issues, including child support and maintenance, James testified that he and Christy had four children: Alexis, age 20, Jack, age 18, Joe, age 16, and Anna, age 13. James testified that his father started Bel-O Sales, a heating, air-conditioning, and plumbing company, and that he had been employed by Bel-O Sales since 1980. James testified that he became a shareholder in 1995 and owned 90% of the shares. James testified that when he acquired Bel-O Sales in 1995, it grew from $3 million in gross sales to $8 or $9 million in gross sales. James testified that in 2008, however, commercial construction halted and negatively affected the whole business.

         ¶ 6 James testified that he also owned 51% of the shares of Bel-O Pest, a pest control and solutions company, which began in 2005. James testified that Bel-O Sales and Bel-O Pest were subchapter S corporations and were, in effect, pass-through entities for which he and Christy paid taxes. Accordingly, James testified that Bel-O Sales maintained investment accounts and that ordinary dividends passed through as income to him.

         ¶ 7 James testified that Bel-O Sales held $600, 000 to $700, 000 in cash reserve accounts for bonding purposes, i.e., to acquire bonds for large commercial projects. James explained that to acquire a large commercial project opportunity, a bond is required, and in order for Bel-O Sales to be bonded, a bonding company reviewed financial statements for profit and ability to pay, in case of failure to complete a project. James testified that generally an insurance audit team reviewed the financial statements and determined a bonding rate based on the company's capability to repay a loan or bond. James testified that although there was no explicit bonding threshold or mark for cash reserves, strong cash reserves resulted in a lower bonding rate. James testified that when the company failed to show a profit, the cash reserves were mandatory to even acquire a bond. James testified that the cost of a bond depended on the ...


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