In re Marriage of Davis

NO. 4-97-0036

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT


In Re: the Marriage of ) Appeal from
SARA DAVIS, ) Circuit Court of
Petitioner-Appellee, ) Vermilion County
v. ) No. 88D557
ROBERT DAVIS, )
Respondent-Appellant. ) Honorable
) Joseph P. Skowronski,
) Judge Presiding.
_________________________________________________________________

JUSTICE GARMAN delivered the opinion of the court:
Respondent Robert Davis appeals from a judgment of the
circuit court of Vermilion County pursuant to section 508 of the
Illinois Marriage and Dissolution of Marriage Act (Act) (750 ILCS
5/508 (West 1996)) requiring that he reimburse petitioner Sara
Davis $7,423.66 in attorney fees. The fees at issue were paid by
Sara to the attorney who successfully represented her in a lawsuit
brought against both Robert and Sara by the Edgar County Bank and
Trust Company. The subject of that lawsuit was an unpaid debt
allocated to Robert at the time of the parties' divorce. For the
reasons stated below, we affirm.
FACTS
Robert Davis and Sara Davis were divorced in 1988 after
27 years of marriage. Sara's petition for dissolution was initial-
ly filed in Edgar County, where both parties reside, but the matter
was transferred to Vermilion County by agreement of the parties.
A judgment of dissolution of marriage was entered by the circuit
court of Vermilion County on December 22, 1988, reserving all other
issues. On August 16, 1990, a supplemental order was entered deal-
ing with the division of property and the payment of rehabilitative
maintenance to Sara. Under the supplemental order, a debt of
$67,800 dating from August 1987 to the Edgar County Bank and Trust
Company, "characterized as a business loan," was "allocated" to
Robert.
On March 19, 1991, Sara filed a petition for rule to show
cause in connection with Robert's nonpayment of the bank loan. The
record of the April 23, 1991, proceedings on that petition was not
provided. The rule to show cause was not issued. (Sara's attorney
indicated at a subsequent hearing on October 19, 1993, that the
petition was denied because Sara had sustained no damage at that
time as a result of Robert's nonpayment of the loan.)
On September 13, 1991, the bank filed suit against both
Sara and Robert for nonpayment of the loan. Robert filed for bank-
ruptcy under chapter 13 of the United States Bankruptcy Code on
October 18, 1991, and was later dismissed from the bank's lawsuit,
which proceeded against Sara. Sara filed a second petition for
rule to show cause in connection with this debt on November 12,
1991. Apparently no hearing was held on that petition.
The circuit court of Edgar County found Sara not liable
on the business loan and issued a memorandum decision to that ef-
fect on August 11, 1992. On September 1, 1992, Robert moved to
voluntarily dismiss his bankruptcy case (which he had converted to
a chapter 7 bankruptcy proceeding in the interim). He then secured
a loan from another bank and paid the business loan in full on
October 16, 1992.
Sara, who did not make any payments on the business loan,
did, however, incur legal defense fees and costs in connection with
the successful defense of the bank lawsuit. On July 30, 1993, Sara
filed a third petition for rule to show cause on this matter.
Count I sought to have Robert held in contempt for his failure to
pay the business loan in a timely manner and ordered to pay her
attorney fees for the bank lawsuit. Count II dealt with the ongo-
ing dispute between the parties regarding maintenance payments and
is not relevant to this appeal.
On August 20, 1993, Robert entered a special and limited
appearance for the purpose of objecting to the jurisdiction of the
trial court in this matter and a hearing was held on October 23,
1993. The trial court ruled on November 15, 1993, that it did have
subject-matter jurisdiction. The written order was entered on No-
vember 28, 1995, nunc pro tunc March 14, 1995. This order also
denied the petition to find Robert in contempt inasmuch as he had
paid the debt to the bank in full and a finding of civil contempt
was not needed to coerce his compliance with an order of the court.
Sara's attorney meanwhile had obtained a default judgment
against her in the amount of $7,723.69 in the circuit court of
Coles County on December 15, 1993. Between that time and the Sep-
tember 20, 1996, hearing on the parties' relative financial ability
to pay the attorney fees, those fees were paid from the proceeds of
the sale of Sara's mother's home. There is a factual dispute as to
how those funds should be characterized. Robert says that the
money used to pay Sara's attorney fees was essentially a gift--it
was never repaid, there was no note, and no terms of repayment were
established. Sara says that the amount used to pay her attorney
was taken from her share of her mother's estate. (During the pen-
dency of this proceeding, Sara's mother sold her home, moved into
a nursing home, and later died.)
The trial court entered a final order on December 20,
1996, containing four findings: (1) the trial court did have sub-
ject-matter jurisdiction under section 508 of the Act (750 ILCS
5/508 (West 1996)); (2) fundamental fairness requires Robert to
reimburse Sara in the amount of $7,423.66 for the attorney fees at
issue; (3) Sara lacks the financial resources to pay this debt and
had to use a portion of the proceeds of her mother's estate for
this purpose, thereby diminishing assets needed for her living
expenses and future retirement; and (4) Robert, although he does
not have substantial liquid assets, does own property and is able
to reimburse Sara if given sufficient time to do so. The order re-
quires Robert to repay Sara $7,423.66 in 60 monthly installments of
$123.72 each.
Robert appeals, arguing that (1) the trial court lacked
subject-matter jurisdiction under section 508 of the Act, (2) sec-
tion 508 of the Act does not apply to attorney fees incurred in
litigation outside divorce court, and (3) the award of attorney
fees to Sara was an abuse of discretion and contrary to law.
I. SUBJECT-MATTER JURISDICTION OF THE TRIAL COURT
The trial court, in its ruling on November 15, 1993,
found that it did have subject-matter jurisdiction for the purpose
of enforcing the terms of the original judgment. The court thus
explicitly rejected Robert's argument that Sara's petition was an
impermissible attempt to modify the terms of the property disposi-
tion by imposing new terms and conditions. Robert argues that the
trial court was in error because count I of Sara's petition, seek-
ing a finding of contempt and the award of attorney fees, did seek
to modify the property terms of the supplemental order of August
16, 1990.
Robert is correct that under section 510(b) of the Act:
"The provisions as to property disposi-
tion may not be revoked or modified, unless
the court finds the existence of conditions
that justify the reopening of a judgment under
the laws of this State." 750 ILCS 5/510(b)
(West 1996).
The provisions for disposition of property in a dissolution judg-
ment are thus a vested right and the trial court lacks jurisdiction
to modify such provisions once judgment has become final. Johnson
v. Johnson, 267 Ill. App. 3d 253, 257, 642 N.E.2d 190, 193 (1994).
The test used to determine if the relief sought is a modification
of the judgment is whether the petitioner seeks to "engraft" new
obligations onto the obligations of the party under the order.
Waggoner v. Waggoner, 78 Ill. 2d 50, 53-54, 398 N.E.2d 5, 8 (1979).
Before we can determine whether Sara's petition sought to
engraft new obligations onto the original order, we must first
determine Robert's obligations under the original order that said
the debt was "allocated" to Robert and nothing more. Disposition
of property is governed by section 503 of the Act (750 ILCS 5/503)
(West 1996)) and, although the Act does not specifically address
the allocation of debts, "[i]t is well settled that marital debts
as well as marital assets must be distributed equitably." In re
Marriage of Lees, 224 Ill. App. 3d 691, 693, 587 N.E.2d 17, 19
(1992). If allocation of debts under the Act has any meaning at
all, it must mean that the party allocated the debt is expected to
pay it and to do so in a manner that does not expose the other
party to liability on the debt. Sara had cosigned for the loan
with Robert during the marriage and his failure to comply with the
order was the cause of her being named in the bank's lawsuit and
having to incur legal fees. Robert's claim that the original order
contained no directive that he even pay the debt at all is disin-
genuous.
This situation is readily distinguishable from the cases
relied upon by Robert. In Waggoner, the former wife sought to
compel her ex-husband to remove a judgment lien and a second mort-
gage, both of which predated the award, on the home awarded to her
under the property disposition. The supreme court held that this
was an attempt to engraft additional obligations onto the decree
and that the trial court, therefore, lacked subject-matter juris-
diction to entertain the ex-wife's motion. In Waggoner, the ex-
wife took property subject to preexisting debts and it would have
been an impermissible modification of the decree to later assign
those debts to the ex-husband.
In In re Marriage of Milliken, 199 Ill. App. 3d 813, 557 N.E.2d 591 (1990), the former wife sought reimbursement from her
ex-husband for her repayment of a loan allocated to him in the
dissolution decree. The loan from the ex-wife's brother to the ex-
husband was not a "marital debt for which she was legally or joint-
ly liable." Milliken, 199 Ill. App. 3d at 819, 557 N.E.2d at 595.
Because the ex-wife's payment of the ex-husband's debt to a third
party was purely gratuitous, requiring him to reimburse her would
have had the effect of engrafting a new obligation onto the final
decree. As this would constitute modification of a final property
disposition, the trial court again lacked subject-matter jurisdic-
tion to hear her petition.
In the present case, Robert was allocated a debt and
Sara, in three separate petitions and by incurring the expense of
defending a lawsuit, sought only to protect herself from being held
liable for Robert's debt, not to transfer a debt from herself to
Robert after the entry of a final order. Neither was she seeking
reimbursement for a debt she had gratuitously paid on his behalf.
Instead, she sought to have him held in contempt for failure to pay
a debt assigned to him and to be reimbursed for legal fees she
incurred defending herself from a lawsuit on the same debt. We
find that Sara was not seeking modification of the property provi-
sions of the supplemental order and, therefore, the trial court did
have subject-matter jurisdiction over count I of her petition.
II. APPLICABILITY OF SECTION 508 OF THE ACT
Robert argues that section 508 of the Act is not applica-
ble to collateral proceedings and that, because Sara's legal fees
were incurred defending a separate civil lawsuit in a different
court, they cannot be the subject of a section 508 award. Sara re-
sponds that the sole reason for her need to obtain the services of
an attorney was Robert's failure to comply with the terms of the
supplemental order and the terms of the loan agreement with the
bank. We must therefore address two questions. First, we must
consider whether a trial court may award attorney fees under sec-
tion 508 of the Act for fees incurred in any type of collateral
proceeding; second, if so, whether Sara's defense of the bank law-
suit is the type of proceeding for which fees may be awarded.
The question of the availability of section 508 fees in
collateral proceedings was addressed most recently by the second
district in In re Marriage of Kent, 267 Ill. App. 3d 142, 640 N.E.2d 973 (1994). In that case, the former wife incurred legal
fees in connection with her former husband's bankruptcy proceeding
in which he sought to discharge his obligations to her under their
settlement agreement. The court stated:
"The plain meaning of the statute allows the
recovery of fees incurred in any proceeding
that has as its goal the enforcement of an
order or judgment entered in a dissolution
proceeding." Kent, 267 Ill. App. 3d at 144,
640 N.E.2d at 974.
Finding that the trial court did have jurisdiction under section
508 of the Act to award attorney fees, the court remanded the case
to determine whether the requirements of section 508(b) of the Act
were met. For reasons discussed below, Sara's claim for attorney
fees must be evaluated under section 508(a) of the Act, but this
does not affect the applicability of the reasoning in Kent. Kent
clearly supports the proposition that it is the purpose, not the
location, of the proceeding that determines whether section 508 of
the Act applies.
In an earlier case, the same court found that a trial
court had erred by failing to consider whether a separate proceed-
ing was brought to enforce the dissolution order. In In re Mar-
riage of Sanda, 245 Ill. App. 3d 314, 612 N.E.2d 1346 (1993), the
former wife attempted to enforce a judgment by two alternative
means, a petition for rule to show cause and a separate civil suit
against the former husband alleging fraud in connection with the
assets that were the subject of the dissolution order. The relief
sought in both proceedings was identical. The court found that the
trial court must determine if the separate proceeding was brought
to enforce the order and, if so, determine reasonable attorney
fees.
These cases from the second district clearly contemplate
the award of section 508 attorney fees in connection with certain
collateral proceedings. Robert relies on three cases from the
first and fifth districts for the opposite conclusion. These cases
are either distinguishable on their facts or, in any event, do not
support Robert's argument that section 508 of the Act may not apply
to any collateral proceeding.
In In re Marriage of Burton, 203 Ill. App. 3d 890, 561 N.E.2d 180 (1990), suit was brought by the former wife's attorney
against his client for services provided to her in the ex-husband's
postdivorce bankruptcy proceeding. The fifth district court stat-
ed:
"Ordinarily, a court hearing dissolution pro-
ceedings does not have subject[-]matter juris-
diction to award attorney fees rendered in any
case other than the one proceeding before it."
(Emphasis added.) Burton, 203 Ill. App. 3d at
894, 561 N.E.2d at 183.
Burton is thus in conflict with Kent, which also involved a
postdivorce bankruptcy proceeding, but even Burton does not suggest
this rule is absolute.
Robert also relies on a first district case, In re Mar-
riage of Pitulla, 141 Ill. App. 3d 956, 491 N.E.2d 90 (1986).
Pitulla involved a dispute between an attorney and his client over
the reasonableness of the fees charged for representation in a
divorce proceeding. A single footnote in Pitulla is relevant:
"[S]ection 508 was never intended to be used
as a vehicle to obtain a judgment for attorney
fees for all kinds of legal services performed
on behalf of a client. Rather, a judgment for
attorney fees under the Act may only be for
legal services 'made in connection with' the
specific provisions of section 508." Pitulla,
141 Ill. App. 3d at 959 n.1, 491 N.E.2d at 92
n.1.
The attorney in this case had apportioned his $10,000 fee equally
between "tax advice" and "matrimonial representation" and it was
not clear whether the tax advice rendered related to any proceeding
under the Act. Therefore, the matter was remanded to determine
whether the tax advice was made in connection with one of the five
enumerated subparagraphs of section 508(a) of the Act. Pitulla
thus stands for the proposition that an attorney is not entitled to
utilize section 508 of the Act to obtain a judgment against his
client unless the fees were earned in connection with one of the
proceedings enumerated in section 508(a) of the Act and does not
speak to the situation before us.
In re Marriage of Campbell, 261 Ill. App. 3d 483, 633 N.E.2d 797 (1993), another case from the first district is similar-
ly inapposite. This case also involved an attorney seeking to
recover unpaid fees from his own client, an ex-husband he had rep-
resented in a divorce. Citing the language in Burton that "ordi-
narily" fees cannot be awarded for representation in a collateral
matter, the court held the trial court:
"had no jurisdiction in this dissolution case
to award *** fees for work performed in
[client's] criminal case, which was proceeding
in a different court totally independent of
the dissolution case." Campbell, 261 Ill.
App. 3d at 491, 633 N.E.2d at 803.
After reviewing these cases, we find that Kent is fac-
tually similar to the present case and is most persuasive. The
collateral proceeding in this case was not a bankruptcy but a law-
suit by a creditor against both Robert and Sara. Robert's filing
for bankruptcy resulted in his dismissal from the suit, leaving
Sara alone exposed to liability on the loan that had been allocated
to him. Like the former wife in Kent, Sara did not initiate this
proceeding in another court, she merely defended her interests
under the terms of the supplemental order. Pitulla and Campbell
are factually distinguishable in that they involved attorneys seek-
ing fees from their own clients for types of representation, crimi-
nal defense and tax advice, that are clearly not among the enumer-
ated proceedings covered by section 508 of the Act. Burton not-
withstanding, we agree with the second district that an award of
attorney fees under section 508 of the Act may be made for expenses
incurred in connection with a proceeding to enforce the provisions
of a dissolution order, even if that proceeding occurs in a differ-
ent court.
Having found that Sara's petition did not seek to modify
the original order and that attorney fees under section 508 of the
Act may be available for some proceedings outside the divorce
court, we must determine whether Sara incurred these attorney fees
in an effort to enforce the property provisions of the supplemental
order, thus coming within the scope of one of the enumerated pro-
ceedings under section 508 of the Act.
The Milliken court distinguished between modification,
found on its facts, and enforcement, where a former spouse seeks
reimbursement for payment of a debt for which her legal liability
has been established. Milliken, 199 Ill. App. 3d at 819, 557 N.E.2d at 595-96. Under this reasoning in Milliken, and entirely
consistent with Waggoner, it would have constituted enforcement of
the property disposition if Sara had allowed the bank to obtain a
default judgment against her and to place a judgment lien on her
home and then sought to compel Robert to pay the loan. It elevates
form over substance to suggest that defending the same lawsuit and
thereby incurring legal expenses is not also for the purpose of
enforcing the order. Enforcement clearly means coercing the other
party into compliance. Enforcement may also mean giving effect to
the terms of the order in collateral litigation. Sara sought to
enforce the allocation of the debt to Robert, to give effect to the
terms of the supplemental order, when she successfully defended the
bank's lawsuit against her.
Robert characterizes Sara's legal fees as "incidental
expenses she claims to have incurred postjudgment in connection
with debt assigned to Robert" and concludes that it "may be unfor-
tunate Sara was sued in the meanwhile." If Sara's claim is based
on enforcement of the original order, and we find that it is, then
her attorney fees are not merely "incidental expenses," they are
specifically allowed by statute to be awarded under certain circum-
stances.
III. APPLICATION OF SECTION 508 OF THE ACT BY THE TRIAL COURT
There are two separate provisions under section 508 of
the Act (750 ILCS 5/508(a)(2) (West 1996)) that apply to enforce-
ment. Under section 508(a) of the Act, the award of attorney fees
is discretionary with the trial court and is made after considering
the relative financial resources of the parties. Under section
508(b) of the Act, however, the award of attorney fees is mandatory
upon a finding that the failure to comply with the order was with-
out cause or justification. A finding of contempt is sufficient to
support a mandatory award of attorney fees but is not necessary.
See In re Marriage of Young, 200 Ill. App. 3d 226, 230, 559 N.E.2d 178, 180-81 (1990). In this case, the question of contempt was
made moot by Robert's payment of the debt after Sara prevailed in
the bank lawsuit. There was no finding by the court that Robert's
earlier failure to pay the bank debt was without cause or justifi-
cation. The court did engage in a balancing of the parties' rela-
tive financial conditions as required by section 508(a) of the Act.
It is clear that the trial court was applying section 508(a) of the
Act, even though the final order does not specifically mention that
provision. We find that section 508(a) of the Act was the proper
provision under which Sara's petition for attorney fees should have
been considered.
Whether the attorney fees of one spouse should be paid by
the other spouse is a decision that lies within the sound discre-
tion of the trial court and will not be disturbed on review absent
an abuse of that discretion. In re Marriage of Blazis, 261 Ill.
App. 3d 855, 870, 634 N.E.2d 1295, 1305 (1994). In general, each
party has the primary obligation to pay his or her own attorney
fees. In re Marriage of Mantei, 222 Ill. App. 3d 933, 941, 583 N.E.2d 1192, 1197 (1991). Robert cites In re Marriage of Hacker,
239 Ill. App. 3d 658, 668, 606 N.E.2d 648, 655 (1992), as placing
the burden on Sara to show her inability to pay and his ability to
pay the fees in question. He argues the fact that she has already
paid the fees and seeks reimbursement is evidence of her ability to
pay.
This court most recently addressed the issue of the award
of attorney fees under section 508 of the Act in In re the Marriage
of Minear, 287 Ill. App. 3d 1073, 679 N.E.2d 856 (1997), which,
after citing Mantei and Hacker for the general rules above, explained:
"Yet financial inability to pay does not de-
mand a showing of destitution, and the fee-
seeking spouse is not required to divest him-
self of capital assets before requesting fees.
[Citation.] It is sufficient to show payment
would exhaust his estate or strip him of his
means of support or undermine his economic
stability." Minear, 287 Ill. App. 3d at 1085,
679 N.E.2d at 865.
This is consistent with In re Marriage of Head, 273 Ill. App. 3d
404, 411-12, 652 N.E.2d 1246, 1252 (1995), cited by Sara, which re-
quires the spouse with the "superior ability to acquire income and
superior capital assets" to pay the other spouse's attorney fees
"if a depletion of principle [sic] would result from requiring the
latter to pay the fees."
The trial court heard and considered detailed evidence
regarding the relative financial conditions of Robert and Sara,
including his gross monthly income of $11,625 and her gross monthly
income of $1,903 (including the $450-per-month maintenance pay-
ment). The order of the trial court clearly applied the principle
of Minear and Head that one spouse should not be required to invade
capital to pay fees the other spouse could pay from current income.
Based upon testimony that the trial court found credible, Sara had
been required to pay the fees from "monies obtained from her
mother's estate, thereby diminishing assets which she needs for her
retirement and future living expenses." The trial court also ac-
knowledged and gave proper weight to Robert's financial condition,
which he describes as "insolvent," when it found that although
Robert "does not have substantial liquid assets, he does have a
house, office building and farm, and can reimburse [Sara] for the
attorney fees from his current income, if given a substantial
length of time to do so."
The order that Robert reimburse Sara by making 60 monthly
installment payments of $123.72 thus addresses the concern raised
by the dissenting judge in Minear (287 Ill. App. 3d at 1085-88, 679 N.E.2d at 866-67 (Cook, J., dissenting)). In that case, either
party would have been required to invade capital assets to pay the
fees; therefore, the dissent stated, there was no justification for
shifting the fees from one to the other. In this case, however,
Robert's payment in monthly installments of approximately 1% of his
gross income over five years will enable Sara to rebuild the capi-
tal depleted by the judgment against her for these fees. We have
previously endorsed the installment approach to the payment of
attorney fees by a party who lacked the present ability to pay but
had sufficient income to do so. In re Marriage of McCoy, 272 Ill.
App. 3d 125, 131-32, 650 N.E.2d 3, 7 (1995).
Robert takes exception to the language of the order that
"fundamental fairness" requires that he reimburse Sara for these
fees, stating in his brief that "fundamental fairness is not a
relevant concept under Section 508." He is, of course, correct
that the trial court is obliged under section 508(a) of the Act to
engage in a balancing of the parties' relative abilities to pay the
fees, not to act as a court of equity. But neither is fairness
totally irrelevant--it is the essence of the exercise of discretion
to reach a fair determination. The trial court did engage in the
proper analysis and did properly exercise its discretion in award-
ing $7,423.66 in attorney fees to Sara, to be paid in monthly in-
stallments over five years.
IV. AVAILABILITY OF AWARD OF ATTORNEY
FEES FOR THIS PROCEEDING

In her brief, Sara requests that this case be remanded so
that she may seek payment by Robert of her attorney fees in connec-
tion with this appeal. Because we have found that the action in
the trial court did constitute a proceeding under the Act, this
appeal does come under section 508(a)(3) of the Act, which allows
the award of attorney fees for "[t]he defense of an appeal of any
order or judgment under this Act." 750 ILCS 5/508(a)(3) (West
1996); In re Marriage of Powers, 252 Ill. App. 3d 506, 508, 624 N.E.2d 390, 392 (1993). Sara is free to file her petition and re-
quires no remand from this court to do so. Such an award rests, of
course, within the sound discretion of the trial court.
CONCL USION
For the foregoing reasons, we hold that the trial court
did have subject-matter jurisdiction over this matter; that section
508 does allow the recovery of attorney fees incurred in the de-
fense of a lawsuit for the purpose of enforcing an order entered in
a dissolution proceeding; and that the trial court, in its discre-
tion, properly ordered that Robert reimburse Sara for attorney fees
by means of monthly installments. The judgment of the trial court
is affirmed.
Affirmed.
STEIGMANN, P.J., and KNECHT, J., concur.