Nov 01, 2016

IICLE Family Law Flash Points - November 2016

1. Trial court abused discretion in barring husband’s business valuation expert from testifying at trial. Husband disclosed his controlled business valuation expert in accordance with Supreme Court Rule 213 more than 60 days prior to trial, but failed to disclose her opinions until just 4 days before trial. The late disclosure was due to wife failing to provide the expert with necessary financial information, including financial statements and general ledgers. Husband did not receive the financial information until less than a month before trial and more than a month after the discovery deadline had passed. Husband should not have been penalized for wife’s failure to comply with discovery. The Court noted that the proper remedy would have been to have granted husband’s motion to continue and allow wife time to depose his business valuation expert prior to the trial. In re the Marriage of Liszka, 2016 IL App (3d) 150238.2. Trial court abused discretion when imputing $17,500 per month to husband when setting child support. At trial, the court found that husband was voluntarily unemployed and unwilling to pay the necessary support for his children. Thus, the court imputed $17,500 per month to him when calculating support because that was the amount of money he was living off of each month. However, the amount of income imputed to a payor spouse must be based on earning capacity. Husband had been involuntarily terminated from his CFO position at the family business during the divorce. No evidence was presented at trial that husband could obtain a job earning $17,500 per month, and therefore the trial court was reversed. The issue was remanded for a proper determination of how much income should be imputed to him based on his earning capacity, not his expenses. In re the Marriage of Liszka, 2016 IL App (3d) 150238.3. Husband’s settlement proceeds from wrongful conviction lawsuit are marital property. The Appellate Court answered in the affirmative the following certified question: “Whether the settlement proceeds received from a wrongful conviction action are marital property when (a) the coerced confession and initial conviction occurred before the marriage, and (b) the conviction was reversed during the marriage.” Husband was incarcerated beginning in 1992 and married his wife in 2000. In 2001, the Appellate Court affirmed Husband’s second conviction, and a third trial was ordered in 2005 on the basis of new DNA evidence. Husband was convicted for a third time in 2009. In 2011, the Appellate Court reversed the third conviction and he was released from prison in January 2012. In October 2012, he filed a section 1983 action, which under federal law accrued when his conviction was reversed, alleging violation of his civil rights based on his wrongful conviction. He then filed a petition for dissolution of marriage in 2014 and in 2015 settled his federal section 1983 lawsuit for $20 million. The Appellate Court found that the settlement proceeds were marital property because a cause of action is marital property if the cause of action accrues during the marriage. Because the cause of action arose only when the third conviction was reversed in 2011, eleven years after the marriage, the settlement proceeds were marital property. In re the Marriage of Rivera, 2016 IL App (1st) 160552.4. Trial court upheld on finding that husband had breached terms of MSA by not either timely buying out wife’s interest in former marital residence or completing sale. In a protracted post-judgment matter, husband was required to either buy-out wife her 50% interest in the former marital residence by a date certain or sell the residence by the same date. Husband did neither, even though he testified that he had the funds to buy-out wife. Instead, he listed the residence for sale after the list date in the MSA and proceeded to aggressively negotiate the sale, causing the buyers to walk away from the deal at the last minute. Wife brought a petition for rule to show cause against husband. While the litigation proceeded, the residence sold and the proceeds were held in escrow. The trial court held husband in indirect civil contempt and made an alternative finding that he had breached the terms of the MSA. The court also awarded wife judgment interest, attorneys’ fees, and distributed the escrow account according to the formula set forth in the MSA. The Appellate Court reversed the finding of contempt because husband could not purge himself of the contempt once the residence sold, but upheld the alternative finding that he had breached the MSA, the award of attorneys’ fees and judgment interest. In re the Marriage of O’Malley, 2016 IL App (1st) 151118. 5. Wife had no common law cause of action for unjust enrichment or quantum meruit based on 13 years of pre-marital cohabitation. The parties were married for less than 7 months when they filed cross petitions for dissolution of marriage. Prior to trial on their matter, wife sought leave to amend her petition with common law claims based on 13 years of pre-marital cohabitation. The trial court denied her motion and wife appealed. Wife argued that the First District’s ruling in Blumenthal v. Brewer, 2014 IL App (1st) 132250 which essentially allowed a spouse in a same-sex relationship to advance common law theories of recoveries, allowed wife in this case to also advance common law theories. The trial court rejected this argument relying on the Supreme Court case of Hewitt v. Hewitt, 77 Ill.2d 49 (1979) which bans common law equitable or quasi-contract claims between unmarried couples. The Appellate Court agreed and declined to extend its holding in Blumenthal to married couples of the opposite sex. It should be noted that since this decision was rendered, the Illinois Supreme Court has overruled the First District Blumenthal ruling. The full opinion of the Supreme Court’s decision can be found here. In re the Marriage of Allen, 2016 IL App (1st) 151620.

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