Sep 17, 2020

Family Law Flash Points - September 2020

1. Child Support True-Up Provisions in Marital Settlement Agreement Stricken by Appellate CourtInIn re Marriage of Solecki,2020 IL App (2d) 190381, the husband brought a three-count postjudgment petition to modify child support, in one count of which he requested the court to calculate the proper “annual true-up” between him and the wife pursuant to the language of their marital settlement agreement (MSA). Central to the analysis of the issue were two particular paragraphs in the MSA that defined the husband’s net income. The first defined it as all income reported on his tax return reduced by federal and state income tax and social security. The second defined it as all income received by a business he owned reduced by (1) 30 percent and (2) the total amount he paid in health insurance for himself and the children. Both parties testified the support provisions in the MSA were negotiated during mediation with a nonlawyer and that a lawyer was hired by the wife only after the mediation to draft the agreement reached. The parties disagreed on the application of the two provisions to the calculation of the husband’s net income. The wife asked the court to strictly construe the terms of the MSA and order the husband to pay $75,919 in retroactive support, and he took the position that the enumerated deductions set forth in each paragraph should apply to all of his income and that he owed no retroactive support. The trial court calculated the husband’s net income by reducing his annual total gross income by his federal and state taxes, social security, health insurance premiums, and maintenance and found the husband owed the wife $7,870 in retroactive support. The trial court then struck the true-up provisions in the MSA prospectively. After engaging in a lengthy analysis of §505 of the Illinois Marriage and Dissolution of Marriage Act (IMDMA), 750 ILCS 5/101,etseq.,before and after the recent amendments, as well as several cases regarding the computation of net income, the appellate court affirmed the trial court’s striking of the true-up provisions. The court ultimately concluded that the MSA true-up provisions and definition of net income contravened the concept of “net income” under §505 of the IMDMA. The court, however, reversed the $7,870 owed by the husband to the wife, stating that since the true-up provisions were irreconcilable with the IMDMA, they should have been stricken entirely. See below regarding the calculation of child support going forward.2. Substantial Change of Circumstances Finding UpheldThe husband inSolecki, supra,also requested the court to reduce his child support obligation due to the fact that his income had decreased since the entry of judgment and the wife’s income had increased. The parties had a complex and difficult to interpret true-up mechanism in their MSA, which was struck down by both the trial and appellate courts. The trial court ultimately determined that a substantial change of circumstances did exist and calculated the husband’s child support at $3,452 per month per §505 of the IMDMA. It then deviated upward to $4,000 per month in light of the fact that it struck the ongoing true-up provisions in the MSA. The appellate court affirmed. The loss of the true-up provisions in the MSA was significant since the husband’s income came from several sources and fluctuated. The true-up held him accountable each year for any shortages in support paid that may have occurred. Striking the provisions justified an upward deviation in the monthly support under the new guidelines. Further, the striking of the true-up provisions in and of itself met the threshold for revisiting the child support award.3. Order for Both Parties To Pay Their Own Attorneys’ Fees in Postjudgment Action AffirmedInSolecki, supra,the wife challenged the trial court’s order disposing of postjudgment child support issues that also ruled that both parties would pay their own attorneys’ fees and costs. The wife argued that the trial court did not provide either party with the ability to file a petition for contribution prior to issuing the order, essentially arguing that the court sua sponte preempted a petition for contribution to fees. The appellate court affirmed, noting that the trial court had the matter under advisement for a month before issuing its order and the wife did not file a petition for contribution during that time, nor did she ask the court to reconsider the issue of costs and attorneys’ fees.4. Retroactive Support Back to Date of Filing of Petition for Dissolution of Marriage UpheldInIn re Marriage of Hochstatter,2020 IL App (3d) 190132, the husband appealed the order of the trial court, which awarded the wife a retroactive amount of unallocated maintenance and child support in the amount of $34,150 in the judgment for dissolution of marriage. The parties had entered into an agreed temporary support order in which the husband had agreed to pay the wife’s mortgage, car insurance, and $250 per month for their child’s personal expenses. At trial, the court determined the amount of the temporary support should have been higher based on its calculations of each party’s income, which was the reason for the retroactive award. A §501 order for temporary maintenance and child support is merely a stopgap that lasts only until the court resolves the pending issues. The trial court was within its authority to award the wife maintenance and child support from the date of her request in her petition for dissolution of marriage, with appropriate credit given to the husband for the payments made under the temporary order. Additionally, the court also dealt with the issue of the deduction of accelerated and non-accelerated depreciation under the amended child support statute. The statute clearly excludes accelerated depreciation from the calculation of net business income, but leaves the issue of non-accelerated depreciation to the discretion of the trial court if the court determines it to be an appropriate business expense that is required to carry on the business.

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