Apr 01, 2015

IICLE Family Law Flash Points - April 2015

1. Supreme Court holds that equitable adoption doctrine does not apply to child custody proceedings. After issuing an advisory opinion for the Appellate Court to revisit its initial opinion in the case of In re Scarlett Z.D., the Appellate Court recognized the equitable parent doctrine under the Supreme Court’s ruling in DeHart v. DeHart, 2013 IL 114137, and remanded the case back to the trial court to make factual findings based on DeHart which would allow a father who had never been married to the mother of an adopted child to make a claim for custody. However, in its opinion the Supreme Court declined to extend the concept of equitable adoption to a child custody determination. After a lengthy discussion on functional parent theories and the applicability of the doctrine of equitable adoption to a probate case (such as DeHart) and a custody case (such as Scarlett Z.D.), the Court ultimately concluded that the doctrine, which allows a person who was accepted and treated as a natural parent or adopted child, and to whom adoption typically was contemplated but never performed, to share in the inheritance of a foster or stepparent, was not appropriate in custody cases. The very definition of equitable adoption is a limited remedial device that allows court to use their equitable powers to permit a child to inherit from the child’s putative equitably adopting parents. Because such a doctrine is merely an equitable remedy, it is not intended or applied to create the legal relationship of a parent and child with all of the legal consequences of such relationship. In re Scarlett Z.-D., 2015 IL 117904.2. Trial court had subject matter jurisdiction to consider father’s complaint to establish the existence of a parent-child relationship and to obtain joint custody. The Supreme Court ruled on the issue of whether a trial court had subject matter jurisdiction to enter an order regarding the paternity and custody/visitation of minor child born to two individuals residing in two different states at the time the child was born. Father lived in Illinois and mother lived in Missouri. Shortly after the child’s birth, father filed his complaint in Illinois and the parties entered into a written parenting agreement providing that they would have joint custody with a parenting schedule. This agreement was codified in an Illinois court order. Years later, mother moved to Nevada with the child. Father subsequently moved for sole custody of the child in Illinois and mother moved to have the original Illinois order declared void for lack of subject matter jurisdiction under the UCCJEA. The Illinois and Nevada trial courts held a UCCJEA conference and thereafter both entered orders declaring the Illinois’ court order void because no jurisdiction existed over the child pursuant to the UCCJEA at the time the order was entered. The Appellate Court reversed the trial court and the Supreme Court affirmed. Subject matter jurisdiction refers to the power of a court to hear and determine cases of a general class to which the proceeding in question belongs and such jurisdiction is conferred entirely by the Illinois constitution. Although child custody was an important component of the proceeding, equally important was father’s desire to obtain legal confirmation that he was the child’s parent and Illinois was unquestionably an appropriate forum for that determination. Furthermore, the Appellate Court was also correct when it set aside the order invalidating the parenting agreement as void, because while the court’s decision to proceed even though the requirements of the UCCJEA had not been met may have been in error, it was not beyond the circuit court’s jurisdiction. McCormick v. Robertson, 2015 IL 118230.3. Retained earnings in a Subchapter S corporation not includable when calculating net income for child support. In a case of first impression, the First District held that retained earnings of a Subchapter S corporation were properly excluded when the trial court calculated father’s net income under Section 505 of the IMDMA. Mother filed a motion to modify child support approximately 8 years after the entry of the judgment for dissolution of marriage, and at the time of the entry of judgment, father did not own any interest in the company. He acquired a 91% interest 4 years later. The evidence showed that from the time he acquired the 91% interest through the hearing, he had consistently taken a $50,000 salary and received distributions only to pay taxes, but that the remainder of the company’s profits were held in the company for working capital. The Court relied on cases from Kansas, In re Marriage of Brand, 44 P.3d 321 (Kan. 2002), and Tennessee, Taylor v. Fezell, 158 W.E.3d 352, 355 (Tenn.2005) and held that trial courts should engage in a case-by-case, fact-specific analysis to determine whether retained earnings of a corporation should be imputed to the sole or majority shareholder for purposes of calculating child support. The factors to be evaluated are: (1) the extent of the obligor’s ownership share in the corporation; (2) the obligor’s ability to decide whether corporate earnings should be retained or distributed; (3) the corporation’s history of retained earnings and distributions, in comparison to post-divorce corporation activities; (4) whether the retained earnings are excessive; and (5) whether there is evidence that income is actually being manipulated. Because the evidence showed that father needed to keep the company’s profits as working capital and mother offered no evidence to rebut this evidence in the form of an accountant or expert, the trial court properly found that the earnings were necessary and appropriate and not excessive. In re the Marriage of Moorthy and Arjuna, 2015 IL App (1st) 132077.4. Husband’s appeal dismissed because he defied the trial court’s order. Husband was ordered to pay retroactive child support in the amount of $337,478 and wife’s attorneys’ fees in the amount of $49,025 after the trial court ruled on wife’s post judgment petition to modify support. The trial court also modified the monthly support amount from $4,250 per month to $19,284 per month. Husband refused to comply with the order and the trial court issued several rules to show cause, but husband had concealed himself outside of Illinois making it impossible for the court to enforce its order. Husband was not entitled to appellate review of an order he was defying and dismissed the appeal. The Court noted that this ruling was not inconsistent with the line of cases that provide one may take a “friendly contempt” finding in order to test the validity of a court order. Those cases generally stand for the proposition that one should not be punished for being found in contempt if (1) the contemnor made a good faith attempt (2) to secure interpretation of an issue without direct precendent and (3) the order would otherwise not be appealable. In re the Marriage of Hill, 2015 IL App (2nd) 140345.5. Claim for child support time-barred by the Probate Act. Ex-wife filed a claim to recover child support arrearages from ex-husband’s estate four years after he died alleging there was an existing lien against the assets in ex-husband’s estate pursuant to Section 505 of the IMDMA. The total amount she sought was $65,976 including interest. However, the Probate Act (735 ILCS 5/18-12(b)) imposes a two-year time limit from the time of the decedent’s death to file a claim for child support, and therefore ex-wife’s claim was time-barred. The Court noted that Section 505(d) of the IMDMA deals with claims against an estate existing based on a support obligation that existed at the time of the parent’s death while Section 505(e) deals with claims against the estate for a new award of support. However, both types of claims are subject to the limitations of the Probate Act. In re the Marriage of Ross and Pruitt, 2015 IL App (2nd) 130961.6. Illinois law applies when Illinois is determined to have jurisdiction as the home state under the UCCJEA. In a case of first impression, the Fifth District overruled the trial court’s application of California substantive law when deciding whether to terminate the father’s parental rights, and held that Illinois law should have applied. The father had suffered from a series of strokes that left him wheel-chair bound and unable to communicate. Mother received sole custody of the children and was later granted leave by consent to remove the children to California. She later remarried and petitioned the California court to terminate father’s parental rights and allow her new husband to adopt the minor children. Father filed a competing petition in Illinois. After the two courts conferred, Illinois was determined to be the home state since father still resided in Illinois. After a trial, the Illinois trial court found that father could not converse, care for, offer advice, or physically connect with the minor children, and terminated his rights after applying the applicable California statutes. The Appellate Court reversed holding that the court should have applied Illinois law and noted that the UCCJEA was promulgated in part to prevent forum shopping, and in keeping with that purpose, the state with jurisdiction should apply its own law. Crouch v. Smick, 2014 IL App (5th) 140382.7. Under the Parentage Act, a petition to enjoin removal of a minor child does not have to be filed prior to the child’s removal. The Appellate Court reversed a trial court’s ruling which declared it did not have authority under the Parentage Act to order a minor child returned to Illinois after she had already been removed. The parties had been residing together since the child’s birth and approximately a year and half later mother removed the child to Minnesota. Three days later father filed a petition to establish paternity and then about two weeks later, after mother refused to return to Illinois with the child, he filed an emergency petition for injunctive relief. The Appellate Court held that the trial court’s reasoning that Section 13.5 only gave it authority to enjoin removal, not return a child after he or she had been removed could lead to absurd results and because this particular statute was the only mechanism available to the court to order the return of a child, it had authority to do so under the Parentage Act. Hedrich v. Mack, 2015 IL App (2nd) 141126.8. Statute of limitations to declare non-paternity of a child begins to run when father learned the child was not biologically his, not later when husband filed a petition for dissolution of marriage and obtained DNA results. The Appellate Court reversed a trial court’s order finding that the presumption of paternity had been rebutted for a child born during the marriage when father presented DNA test results at a hearing during the pendency of his petition for dissolution of marriage. The evidence showed that both husband and wife knew the minor child was not biologically father’s when she was diagnosed with a particular genetic disease at birth. However, the parties agreed to stay together as a family and remained married for 8 more years. Section 8(a)(3) of the Parentage Act provides that an action to declare the non-existence of a parent-child relationship will be barred if brought later than 2 years after the petitioner obtains knowledge of the relevant facts. Furthermore, when mother asserted that the statute of limitations had run of father’s ability to file such a claim, the burden shifted to father to show that he had only obtained knowledge of the relevant facts within 2 years of brining his petition. Because knowledge of relevant facts triggering the statute of limitations can be inferred where it has been demonstrated that a man has serious doubts as to whether he is the child’s parent, and because the genetic disease gave rise to those serious doubts, father was now precluded from being able to ask the court to declare him to not be the father of the child. In re the Marriage of Ostrander, 2015 IL App (3d) 130755.

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