In re Marriage of McHenry

No. 1-95-4019 September 30, 1997

In re MARRIAGE OF ) APPEAL FROM THE
) CIRCUIT COURT OF
) COOK COUNTY,
) COUNTY DEPARTMENT,
PAUL M. McHENRY, ) DOMESTIC RELATIONS
) DIVISION
Petitioner and Counterrespondent- )
Appellant, )
)
)
and ) No. 91-D-16747
)
)
PATRICIA A. McHENRY, ) THE HONORABLE
) GEORGE W. ROTHSCHILD
Respondent and Counterpetitioner- ) AND DRELLA SAVAGE,
Appellee. ) JUDGES PRESIDING.

PRESIDING JUSTICE COUSINS delivered the opinion of the
court:
Petitioner, Paul M. McHenry, appeals from a supplemental
judgment for dissolution of marriage entered on June 29, 1995,
involving the distribution of marital and nonmarital property.
On appeal, petitioner seeks reversal and remand for a new trial,
arguing that the trial court failed to create an equitable
distribution by: (1) awarding respondent the more profitable of
two businesses without regard to their respective values and
based solely on each party's respective contributions to the
businesses; (2) avoiding the issue of dissipation of marital
property; (3) failing to take into account petitioner's economic
circumstances, age, health, needs, future income prospects, and
prior financial obligations; (4) failing to take into account the
relative credibility of the parties in weighing their testimony;
and (5) awarding attorney fees outside the parties' presence and
without a hearing.
BACKGROUND
Petitioner, Paul M. McHenry, appeals from the supplemental
judgment for dissolution of marriage entered on June 29, 1995,
which divided the nonmarital and marital property of petitioner
and respondent, Patricia A. McHenry. Petitioner and respondent
were married in 1979, at which time petitioner owned a sole
proprietorship accounting practice, and respondent was employed
as the comptroller of a potato company. During the marriage, the
parties acquired three businesses and three parcels of real
property: Telecom Answering Service (Telecom); McHenry and
McHenry, Ltd. (McHenry and McHenry), an accounting firm formed by
both parties; Martin Welding Machine Rental and Repair (Martin
Welding), a machine rental business located in Hammond, Indiana;
the real estate occupied by Martin Welding; rental property in
Homewood, Illinois, consisting of 13 residential and commercial
units; and a marital residence in Olympia Fields, Illinois. In
addition, the parties acquired a membership in the Olympia Fields
Country Club. Also, upon separation in 1991, the parties sold
their accounting business, McHenry and McHenry, to a third party
under a five-year buyout agreement.
After extensive evidence was presented by both parties, the
trial court distributed the assets in the following manner.
Respondent was awarded Telecom, half of the net proceeds from the
sale of the marital residence, half of the net proceeds from the
sale of the Homewood real estate, half of the net rental income
remaining from the Homewood property, and all accounts held
solely in respondent's name. Petitioner was awarded Martin
Welding, the real property upon which Martin Welding was located,
any and all past and future proceeds from the sale of McHenry and
McHenry, any and all interest in the Olympia Fields Country Club,
half of the net proceeds from the sale of the marital residence,
half of the net proceeds from the sale of the Homewood real
estate, half of the net rental income remaining from the Homewood
property, and all accounts held solely in petitioner's name.
On appeal, petitioner argues on several grounds that the
above distribution was inequitable.
We affirm.
OPINION
I
Petitioner first contends that an inequitable distribution
of marital assets resulted from the trial court's failure to make
determinations as to the value of the two principal, ongoing
business assets, Telecom and Martin Welding. At trial, both
parties presented voluminous evidence regarding the value of the
marital assets. The parties' expert witnesses, however,
disagreed as to the value of Telecom and Martin Welding.
Petitioner's expert valued Telecom at $590,000, while
respondent's expert concluded that it was worth $440,000.
Petitioner argues that respondent's expert undervalued Telecom by
including an unusually low revenue period in his evaluation.
Contrarily, respondent argues that petitioner's expert
exaggerated Telecom's value by factoring in an unusually low
chief executive officer salary.
The experts also disagreed as to the value of the McHenrys'
less successful business, Martin Welding. Petitioner's expert
concluded that this business was worth $292,000, while
respondent's expert valued it at $410,000. Once again, both
experts disagreed on several factors, including the owner's
compensation. In addition, petitioner's expert opined that the
fair market value of the land upon which Martin Welding was
located was $100,000. Respondent's expert valued the property
closer to $175,000. Petitioner, however, argues that, due to a
strong possibility that the property contains environmental
contamination, its value may be little or nothing. Respondent
claims that petitioner's argument is wholly speculative and
unsupported by any evidence of contamination.
At trial, the court made no determination as to the current
market value of Telecom or Martin Welding and its property before
making its distribution. The court did note, however, that in
awarding Telecom to respondent and Martin Welding to petitioner,
it considered "the relative contribution [sic] of the parties to
the respective assets over the rather long life of [their]
relationship." Petitioner claims that the absence of such
valuations constitutes reversible error. We disagree.
This court has established in a long line of cases that
section 503 of the Illinois Marriage and Dissolution of Marriage
Act (the Act) (750 ILCS 5/101 et seq. (West 1996)) does not
require the court to place a specific value on each marital asset
in considering the value of property to be set aside to each
spouse. See In re Marriage of Brown, 241 Ill. App. 3d 305, 308,
608 N.E.2d 967 (1993); In re Marriage of Hagshenas, 234 Ill. App.
3d 178, 200, 600 N.E.2d 437 (1992); In re Marriage of Frederick,
218 Ill. App. 3d 533, 544, 578 N.E.2d 612 (1991); In re Marriage
of Courtright, 155 Ill. App. 3d 55, 59, 507 N.E.2d 891 (1987); In
re Marriage of Randall, 157 Ill. App. 3d 892, 896-97, 510 N.E.2d 1153 (1987); In re Marriage of Hyland, 95 Ill. App. 3d 31, 37,
419 N.E.2d 662 (1981). The Act only requires the court to
consider the value of the property apportioned to each spouse and
that there be sufficient evidence of value in the record to allow
review of the trial court's distribution. See Brown, 241 Ill.
App. 3d at 308; Hagshenas, 234 Ill. App. 3d at 200; Courtright,
155 Ill. App. 3d at 59; Randall, 157 Ill. App. 3d at 896; In re
Marriage of Woolsey, 85 Ill. App. 3d 636, 637, 406 N.E.2d 1142
(1980).
Petitioner relies upon In re Marriage of Boone, 86 Ill. App.
3d 250, 252, 408 N.E.2d 96 (1980), for the proposition that trial
courts must make valuations of the parties' primary marital
assets, including businesses. In Boone, however, this court
based its holding upon the fact that there was no proper evidence
in the record of the value of the property in question. Boone, 86
Ill. App. 3d at 251. Likewise, in In re Marriage of Leon, 80
Ill. App. 3d 383, 385-86, 399 N.E.2d 1006 (1980), this court
reversed a division of marital property based on the trial
court's failure to find the value of the husband's insurance
business, since there was insufficient evidence adduced at trial
to support any distribution of that asset. See also In re
Marriage of Olsher, 78 Ill. App. 3d 627, 397 N.E.2d 488 (1979)
(finding that, in the absence of evidence of value, the trial
court's division of property was an abuse of discretion).
In the cases upon which petitioner relies, the reviewing
courts determined that the trial courts lacked proper or adequate
evidence to make certain distributions. These cases are
distinguishable from the case sub judice. Here, as petitioner
admits, both parties presented vast amounts of evidence of value
upon which the trial court could have based its disposition.
This is not a case, therefore, in which there is a lack of
competent evidence in the record to permit review by this court.
In cases involving the distribution of marital property, the
appellate court will reverse only upon a finding that the lower
court abused its discretion. In re Marriage of Kerber, 215 Ill.
App. 3d 248, 254, 574 N.E.2d 830 (1991). In the case at bar, we
do not find that the trial court abused its discretion, where it
had ample evidence upon which it could have based its
distribution, and no specific valuation of marital assets was
mandated.
II
Petitioner also argues that the court failed to take into
account the parties' contributions to the marriage as a whole, as
opposed to each asset. Although the parties presented
conflicting testimony regarding their contributions to Telecom
and Martin Welding, it appears that petitioner made much greater
contributions to Martin Welding as compared to Telecom, and that
respondent made considerably larger contributions to Telecom as
compared to Martin Welding. The trial court considered these
contributions in awarding Telecom to respondent and Martin
Welding to petitioner. Petitioner, however, claims that the
trial court erred in considering the parties' relative
contributions to these assets and by ignoring the parties'
respective contributions to the marriage generally. We disagree.
The Act requires the court to consider all relevant factors,
including 12 enumerated factors, in making its property
distributions, one of which is the contribution of each party to
the value of the marital property. 750 ILCS 5/503(d)(1) (West
1996). Courts have interpreted the provision's use of
"contribution" to include contributions to the marital
relationship generally as well as specific contributions to
certain marital assets. In In re Marriage of Preston, 81 Ill.
App. 3d 672, 677, 402 N.E.2d 332 (1980), for example, the court
considered one spouse's investment of separate funds in the
marital home as contributions to the acquisition of marital
property. Similarly, in In re Marriage of Gustke, 78 Ill. App.
3d 274, 276-77, 397 N.E. 146 (1979), the court awarded one spouse
$18,000 before any division of the proceeds of the sale of the
marital home based on that spouse's contributions to the purchase
and improvements of the house.
In the instant case, there is no evidence in the record that
the trial court did not take into account each party's
contribution to the marital estate as a whole. Furthermore, it
is proper for the trial court to consider specific contributions
to certain assets in making its distribution. We find
petitioner's argument to be disingenuous, for he argues in the
previous section that the court should have made specific
determinations with respect to one of the Act's enumerated
factors (value of property), but that the court should not have
made specific findings as to another of the Act's required
factors (contribution to property).
III
Petitioner further contends that the trial court failed to
consider the issue of dissipation of assets. In the case at bar,
both parties made substantial claims of dissipation. The issue
was raised on several occasions at trial, and considerable
evidence was introduced with respect to dissipation. The trial
court ultimately ruled that no dissipation occurred.
Generally, the court must consider dissipation in accordance
with section 503(d)(2) of the Act. 750 ILCS 5/503(d)(2) (West
1996). The courts have established a strict test for
dissipation, however, stating that dissipation occurs when a
spouse uses marital property for his or her own benefit for a
purpose unrelated to the marriage at a time when the marriage has
undergone an irreconcilable breakdown. In re Marriage of
Petrovich, 154 Ill. App. 3d 881, 885, 507 N.E.2d 207 (1987).
Whether certain conduct constitutes dissipation depends upon the
facts of each case. In re Marriage of Westcott, 163 Ill. App. 3d
168, 174, 516 N.E.2d 566 (1987). However, the trial court's
finding that no dissipation occurred will not be reversed absent
an abuse of discretion. Petrovich, 154 Ill. App. 3d at 886.
Considering that the trial court's decision on this issue
should be given great deference, and that it had more than
sufficient evidence upon which to base its ruling, we find that
the trial court did not abuse its discretion in finding that no
dissipation occurred.
IV
Next, petitioner claims that the court failed to consider
petitioner's current and future economic circumstances, age,
health, needs, and prior obligations as required by section
503(d) of the Act. Petitioner argues that his physical frailty,
preclusion from practicing as an accountant within 50 miles of
Chicago under the noncompetition provision of the McHenry and
McHenry buyout agreement, and obligations of child support from a
previous marriage were not considered by the trial court.
Respondent argues that she also may have a debilitating illness,
that petitioner's health was not in jeopardy, that petitioner
actually continued to work as an accountant and consultant, that
their ages were only two years apart, and that petitioner
overstated his prior obligations of child support, where one of
two children was emancipated.
Petitioner cites no authority other than the Act itself to
support his position that the trial court failed to consider the
aforementioned factors. Assuming, arguendo, that petitioner's
argument is supportable, we find no evidence in the record that
the trial court failed to weigh the above factors in making its
property distribution. Both sides presented vast evidence
relating to these factors, and the trial court duly noted this
before rendering its disposition. We, therefore, hold that no
error occurred with respect to the court's consideration of the
enumerated factors provided for in section 503(d) of the Act.
V
Petitioner further contends that the trial court erred in
its determination of respondent's credibility. Petitioner bases
this argument on the grounds that respondent was impeached at
trial to such a degree as to warrant a departure from the rule
that great deference is given to the trial court in making
determinations of credibility.
At trial, respondent testified inconsistently with respect
to a $25,000 account she established as well as to a deposit of a
$10,000 tax refund. Petitioner filed a petition for criminal
contempt in light of respondent's testimony and the evidence.
The trial court, however, dismissed the petition in its
supplemental judgment for dissolution of marriage.
It is well established that determinations by the trier of
fact as to the credibility of parties are given great deference.
In re Marriage of Blitstein, 212 Ill. App. 3d 124, 132, 569 N.E.2d 1357 (1991). Our review of the record does not support a
finding that the trial court erred in its assessment of
respondent's credibility. The trial court considered
petitioner's criminal contempt petition, respondent's response
and memorandum thereto, and heard argument on the issue from both
sides in chambers before making its ruling. The trial court,
therefore, had sufficient evidence at its disposal and was in a
better position to observe witnesses in making such
determinations. See also In re Marriage of Wright, 212 Ill. App.
3d 392, 395, 571 N.E.2d 197 (1991) ("There is a strong and
compelling presumption that the trial court, the entity closest
to the litigation and in the best position to observe the
witnesses, has made the proper *** decision").
VI
Petitioner also argues that the court erred in awarding
attorney fees in chambers, outside the parties' presence, and
without a hearing. Petitioner bases this argument on section 508
of the Act, which provides that the trial court may award
attorney fees after due notice and a hearing. 750 ILCS 5/508
(West 1996). At trial, petitioner's attorney stipulated that an
evidentiary hearing on the attorney fees petitions was
unnecessary and suggested that the court rule on the parties'
petitions for attorney fees in chambers. Upon review of lengthy
and detailed petitions and supporting affidavits filed by
attorneys for both sides, the court ordered petitioner to pay his
attorney $43,893 and ordered respondent to pay her attorney
$33,981, as well as $7,500 to petitioner's attorney. Petitioner
claims that it was error for the trial court to make rulings as
to attorney fees without giving petitioner the benefit of a
hearing.
This court has held that, in a divorce proceeding, a trial
court is not required to conduct a special hearing on the
question of attorney fees when no such hearing is requested.
Rattray v. Rattray, 43 Ill. App. 3d 853, 856, 357 N.E.2d 701
(1976). Indeed, where a party to a dissolution proceeding does
not request a hearing on its ability to pay attorney fees, that
party has waived its right to a hearing on that issue, and the
trial court may award attorney fees based upon pleadings,
affidavits, and its own experience. In re Marriage of Wolf, 180
Ill. App. 3d 998, 1009, 536 N.E.2d 792 (1989).
Petitioner relies on In re Marriage of Pagano, 154 Ill. 2d 174, 184 (1992), for the proposition that the waiver of the right
to such a hearing cannot be made unless the client acts
deliberately and understands the rights he or she is waiving.
Petitioner's reliance is misplaced, however, as the court in
Pagano declined to hold that the fee hearing provision in section
508 can never be waived by a client, since the propriety of such
a waiver depends upon the facts of each case. Pagano, 154 Ill. 2d
at 184.
In the case at bar, it was petitioner's attorney who
stipulated that a fee hearing was unnecessary, and this
stipulation, like all others, was binding on petitioner, absent a
showing that it was unreasonable, the result of fraud, or
violative of public policy. In re Marriage of Miller, 112 Ill.
App. 3d 203, 208, 445 N.E.2d 811 (1983), citing Hudson v. Safeway
Insurance Co., 106 Ill. App. 3d 391, 393-94, 435 N.E.2d 1255
(1982). Considering the aforementioned stipulation, the
attorneys' readiness to have the trial court rule on the issue,
and the fact that the court heard a great deal of evidence on the
subject, we hold that no error occurred with respect to the award
of attorney fees.

VII
Lastly, we treat petitioner's general argument that, based
on the foregoing circumstances, the trial court failed to make an
equitable distribution of the marital assets. Petitioner bases
this argument primarily upon the fact that Telecom was awarded to
respondent and Martin Welding to petitioner.
Illinois courts have established that an equitable division
need not be an equal one. In re Marriage of Schmidt, 242 Ill.
App. 3d 961, 966, 610 N.E.2d 673 (1993); In re Marriage of
Miller, 112 Ill. App. 3d 203, 207, 445 N.E.2d 811 (1983); In re
Marriage of Woodward, 83 Ill. App. 3d 253, 256, 404 N.E.2d 575
(1980); In re Marriage of Dietz, 76 Ill. App. 3d 1029, 1032, 395 N.E.2d 762 (1979). In addition, when awarding income-producing
assets to one spouse, the court may achieve an equitable
distribution by awarding offsetting payments to the other spouse
or by awarding a greater share of the total marital assets to the
spouse who does not receive the income-producing assets. In re
Marriage of Swanson, 275 Ill. App. 3d 519, 528, 656 N.E.2d 215
(1995), citing In re Marriage of Jarvis, 245 Ill. App. 3d 1007,
1012, 614 N.E.2d 1294 (1993).
In the case sub judice, petitioner bases his argument partly
upon the trial court's statement that it was contemplating a 50-
50 division of the marital property. This remark was taken out
of context, however, where the trial court further stated that
the property division ultimately would not be equal.
As to the value of Telecom compared to that of Martin
Welding and petitioner's claim of inequity based thereon, we note
that it is fallacious for petitioner to compare the two
businesses in isolation. One should view the two businesses in
light of all the marital assets and all the relevant factors
enumerated in section 503(d) of the Act. In re Marriage of
Schmidt, 242 Ill. App. 3d 961, 966, 610 N.E.2d 673 (1993). A
more proper comparison would be that of the dissimilar awards
given to petitioner and respondent. All other marital assets
having been divided equally, respondent received Telecom, while
petitioner was awarded Martin Welding, the real property
thereunder, all proceeds from the McHenry and McHenry sale, and
the Olympia Fields Country Club membership. Our review of the
record reveals that the parties' experts valued Telecom at
$440,000 to $590,000. The mean value of Telecom from these
estimates is $515,000. The experts gave the following range of
values to the assets awarded to petitioner: Martin Welding at
$292,000 to $410,000 (mean value equalling $351,000); the real
estate at Martin Welding at $100,000 to $175,000 (mean value
equalling $137,500); proceeds from McHenry and McHenry at $50,000
to $70,000 (mean value equalling $60,000); and the country club
membership at $25,000.
When adding the respective mean values, it appears that
respondent received approximately $515,000 worth of additional
marital property, while petitioner received additional property
worth approximately $573,000. Even disregarding the country club
membership and looking only at the parties' most conservative
valuations, it appears that respondent received an added award
worth $440,000, while petitioner was further awarded property
worth $442,000. In our view, the evidence indicates that the
trial court did, indeed, make an equitable distribution by
awarding petitioner a larger share of the marital assets in order
to offset its award of the more fruitful income-producing
business to respondent.
This court will reverse only upon a finding of an abuse of
discretion by the lower court. In re Marriage of Kerber, 215 Ill.
App. 3d 248, 254, 574 N.E.2d 830 (1991). We hold that no such
abuse occurred.
Accordingly, we affirm the decision of the trial court.
Affirmed.
CAHILL and LEAVITT, JJ., concur.