Jul 01, 2016

IICLE Family Law Flash Points - July 2016

1. Dissipation due to engaging in high-risk securities trading upheld. Ex-husband received net proceeds of $169,725 from his father’s wrongful death lawsuit. The trial court ordered him to make a $15,000 lump sum payment of child support as the result of his receipt, effectively awarding the ex-wife a portion of the settlement proceeds that were earned before she filed. Ex-husband appealed. The Fifth District declined to follow the Second District’s decision in Villanueva v. O’Gara, 282 Ill.App.3d 147 (1996) which held that damages for pain and suffering are not considered “income” for support purposes because they make the plaintiff whole rather than increasing the plaintiff’s wealth. The Fifth District stated that it believed that principle was at odds with the expansive statutory definition of child support, and that in this case the net proceeds represented non-recurring income the year in which it was received. The $15,000 ordered was below statutory guidelines on the net amount received by the ex-husband, but the Court noted that was justified because of the nonrecurring nature of the income and the fact that the ex-husband had already spent it. In re the Marriage of Fortner, 2016 IL App (5th) 150246.2. Post-nuptial agreement incorporated into judgment for dissolution of marriage was not unconscionable. Husband moved to vacate the judgment for dissolution of marriage on the grounds that it was unconscionable. The trial court denied the motion and the Appellate Court affirmed. The agreement was not procedurally unconscionable because the parties signed the final version of the agreement, the joint parenting agreement and the judgment two weeks after he and wife stopped attending counseling and three weeks after wife had filed for divorce. Therefore, husband could not have reasonably believed that there was a possibility the parties would reconcile. The agreement was not substantively unconscionable because husband received a number of assets he might not have received if the case had been litigated, including half of the equity in the family home which wife had a substantial non-marital reimbursement claim to. Although the support arrangement was quite favorable to wife (she received just under 50% of husband’s gross income), she had herself and the minor child to support and husband received more than 50% of the marital assets. In re the Marriage of Labuz, 2016 IL App (3d) 140990.3. Section 2-1401 motion should not have been dismissed for lack of wife’s due diligence in pursuing such motion. The parties were originally divorced in 2005 and at the time of the filing of that petition, husband owned 46.5% of the stock in a business. Under that judgment husband received his interest in the business but no value was placed on it. Less than two hours after the judgment was entered, he agreed to sell the business for $16 million. The record showed that at no point did wife know that he was contemplating the sale or know that the business was valued at $16 million. Two years later, the parties remarried and five days before their marriage they singed a prenuptial agreement. Husband’s assets were listed at $7,833,053. Wife discovered the possible fraudulent concealment of the sale of the business during the discovery phase of their second divorce and brought a 2-1401 motion. The trial court dismissed wife’s 2-1401 motion because it believed that at the point wife signed the prenuptial agreement she became aware of the operative facts that gave rise to her claim by virtue of the value of husband’s assets, and that she failed to exercise due diligence in pursuing that claim. The Appellate Court disagreed and stated it did not believe wife’s simple knowledge of the increase in value of husband’s assets put her on notice of his fraudulent concealment in the first divorce. Wife adequately alleged fraud not only on her but also on the court and her case should not have been dismissed. In re the Marriage of Van Ert, 2016 IL App (3d) 150433.4. Improper process for securing bystander’s report fatal to request for appellate review. Father brought a petition for rule to show cause against mother for her failure to bring the minor child to Illinois for his Thanksgiving parenting time. Mother moved to stay the contempt proceedings which was denied. She was found to be in contempt and appealed both rulings. Because no court reporter was present, mother attempted to create a bystander’s report to supplement the record on appeal. Supreme Court Rule 321 sets forth the specific procedure for creating a bystander’s report, including serving the document on all parties and giving them the opportunity to propose amendments to the document before submitting it to the court for approval. Because there was no indication in the record that the mother had properly served the proposed bystander’s report on the father or his counsel, the report was inadequate, and the trial court should not have certified it. However, the underlying rulings of the trial court did not change as the Appellate Court upheld the finding of contempt since there was an inadequate record before it which would allow for review. In re G.E., 2016 IL App (2d) 150643.

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