In re Marriage of Minear

In re Marriage of Minear, No. 83414 (3/26/98)

Docket No. 83414--Agenda 11--January 1998.
In re MARRIAGE OF PAULA B. MINEAR, Appellee, and ROBERT E.
MINEAR, Appellant.
Opinion filed March 26, 1998.

JUSTICE MILLER delivered the opinion of the court:
Paula B. Minear filed in the circuit court of Douglas County a
petition for dissolution of her marriage to Robert E. Minear. In October
1994, the trial judge found that grounds for dissolution existed. In July 1996,
the judge filed a memorandum opinion resolving issues of child custody and
visitation, child support, maintenance, property distribution, and attorney
fees.
Robert appealed and argued that the trial judge abused his discretion
in deciding issues relating to maintenance, child support, property
distribution, and attorney fees. The appellate court, with one judge
dissenting, affirmed. 287 Ill. App. 3d 1073. We granted leave to appeal (166
Ill. 2d R. 315) and now affirm the judgment of the appellate court.

BACKGROUND
Paula and Robert were married in 1975. The couple's daughter,
Melissa, was born in 1978 and their son, Michael, was born in 1981. Paula
and Robert own a home and a business. The business is a service station
operated by Robert. Once the children reached school age, Paula returned to
work as a medical receptionist.
In February 1994, Paula filed a petition for dissolution of marriage
under the Illinois Marriage and Dissolution of Marriage Act (Act) (750 ILCS
5/101 et seq. (West 1994)). In October 1994, the judge found grounds for
dissolution of the marriage. In December 1994, a hearing was held on
Paula's petition for temporary relief. See 750 ILCS 5/501 (West 1994).
Following the hearing, the judge entered orders which: (1) granted temporary
custody of the children to Robert, subject to visitation by Paula; (2) awarded
temporary possession of the marital residence to Robert; (3) directed Robert
to pay temporary maintenance to Paula in the amount of $300 per month;
and (4) directed Robert to pay Paula $5,000 so that Paula could rent and
furnish an apartment.
In November 1995, April 1996, and May 1996, hearings were held
regarding marital property distribution, child custody and support,
maintenance, and attorney fees. In order to divide the marital property,
evidence was presented regarding the property owned by Paula and Robert.
The marital residence was appraised at $95,000 subject to an outstanding
indebtedness of $46,000. The service station was appraised at $165,000 with
no outstanding indebtedness. No part of the station's value was attributed to
goodwill. However, due to leaking underground storage tanks, the service
station is subject to an estimated liability of $84,630 in future environmental
cleanup costs. Evidence was also presented regarding the value of the
furnishings found in the marital residence; the equipment found in the
service station; the vehicles owned by Paula and Robert; and the checking,
savings, investment, and retirement accounts held by Paula and Robert.
In addition, the judge heard evidence regarding Paula's and Robert's
earning capacity. Paula works as a medical receptionist and the judge found
that Paula's net monthly income is $1,086. The judge calculated this amount
from figures found on Paula's direct deposit payroll statement. Robert
operates the service station and the judge found that Robert's net monthly
income is $3,063. The judge calculated this amount from the service
station's balance sheet and income statement prepared by Robert's
accountant for the first nine months of 1995.
In order to find Robert's net monthly income, the judge subtracted
from total income ($688,162) the station's total cost of sales ($543,558) and
total expenses ($121,617). The result ($22,987) represented Robert's income
for the first nine months of 1995. The judge added back Robert's
depreciation expense ($10,874) because depreciation did not represent an
out-of-pocket expense for Robert. The judge then subtracted income taxes
($6,292) and divided by nine to arrive at Robert's net monthly income
($3,063).
The judge heard further evidence on child custody, child support, and
maintenance so that the previously entered temporary orders could be
adjusted or made permanent. Following the conclusion of these hearings, the
judge issued a memorandum opinion. The judge granted custody of Michael
to Robert. Because Melissa was 12 days away from majority at the time, the
judge did not enter a custody order as to Melissa. No issues regarding
custody or visitation are raised in this appeal.
The judge divided the marital property equally between Paula and
Robert. The judge awarded to Paula the marital residence (net value of
$49,000), certain cash and investment accounts ($24,813), household
furniture ($10,025), a note receivable ($4,000), an automobile (value
undetermined), and an equalizing payment from Robert ($10,615) for a total
marital property award of $98,453. The judge awarded to Robert the service
station (net value of $80,370), certain cash and investment accounts
($17,732), household furniture (value undetermined), and various other
property ($10,965). After subtracting the equalizing payment made to Paula,
Robert was left with a total marital property award of $98,453.
The judge ordered Robert to pay Paula maintenance in the amount
of $500 per month for an indefinite period of time. The judge considered
several statutory factors (see 750 ILCS 5/504 (West 1994)) as well as the
relative incomes of Paula and Robert. The judge found that Paula's earnings
represent 26% of the couple's net monthly income and that Robert's
earnings represent 74% of the income. Based on this disparity, the judge
found that Paula "cannot maintain herself anywhere near the standard of
living enjoyed by the parties during the course of their marriage without
indefinite maintenance from [Robert]." The judge stated, however, that "said
maintenance may be modified or terminated in accordance with the statutory
factors."
The judge did not award child support to Robert. In making this
determination, the judge referred to the net monthly incomes of Paula and
Robert. The judge then stated: "That considering the comparison of each of
the party's income and taking into consideration the amount of maintenance
[Robert] is hereinafter ordered to pay unto [Paula], [Robert] has a net
income in excess of that of [Paula] and is not in need of child support from
[Paula]."
The judge awarded Paula a portion of her attorney fees to be paid for
by Robert. The judge found that Paula incurred $3,700 in attorney fees and
costs. In light of the relative financial positions of Paula and Robert, the
judge ordered Robert to pay 74% of Paula's attorney fees ($2,731). This
percentage represents Robert's portion of the couple's net monthly income
prior to any maintenance payments made to Paula.
Robert filed a notice of appeal. In response, Paula filed a motion
requesting that Robert pay a portion of her appellate attorney fees. Paula's
attorney estimated that it would cost $3,000 to defend an appeal. Paula
requested that Robert pay $2,000 of her anticipated fees. The judge noted
that the Act provides for an award of attorney fees when fees are expected
to be incurred in the defense of an appeal. See 750 ILCS 5/508(a)(3) (West
1994). Because of Paula's and Robert's relative monthly incomes, the judge
found Paula's request reasonable and ordered Robert to pay $2,000 as
prospective attorney fees.
On appeal, Robert's primary contention was that the trial judge erred
in failing to deduct Robert's depreciation expense from his income in
arriving at a net monthly income figure. According to Robert, this alleged
error affected the judge's findings regarding maintenance, child support, and
attorney fees and amounted to an abuse of discretion. Robert also argued that
the judge abused his discretion in dividing the marital property.
The appellate court affirmed. 287 Ill. App. 3d 1073. The court found
that the trial judge did not abuse his discretion in dividing the marital
property, awarding maintenance to Paula, refusing Robert's request for child
support, and ordering Robert to pay a portion of Paula's attorney fees. In
addition, the court addressed Robert's contention that his depreciation
expense should have been deducted from his net income. The court found
that section 505(a)(3)(h) of the Act (750 ILCS 5/505(a)(3)(h) (West 1994))
does not provide for depreciation to be deducted from net income, and that
in any event, Robert failed to present sufficient evidence to justify such a
deduction.

DISCUSSION
As was true in the appellate court, Robert's primary argument here
is that the trial judge abused his discretion in failing to deduct a depreciation
expense in calculating Robert's net income. To support his claim, Robert
relies on two appellate court cases which find that a depreciation expense
may be deducted from net income under section 505(a)(3)(h) in determining
a child support obligor's level of support if the expense is reasonable and
necessary for the production of income. See Posey v. Tate, 275 Ill. App. 3d
822, 826-28 (1st Dist. 1995); In re Marriage of Davis, 287 Ill. App. 3d 846,
852-54 (5th Dist. 1997); 750 ILCS 5/505(a)(3)(h) (West 1994).
Paula argues, however, that the appellate court correctly determined
that depreciation is not an "[e]xpenditure[ ] for repayment of debts" and thus
cannot be deducted from net income as defined in section 505(a)(3)(h). 750
ILCS 5/505(a)(3)(h) (West 1994). As did the appellate court in this case,
Paula relies on Gay v. Dunlap, 279 Ill. App. 3d 140, 145-48 (4th Dist.
1996). Gay found that entertainment, meal, and car-related expenses cannot
be deducted from a child support obligor's net income under subsection
(a)(3)(h) because these business expenses "are not expenditures for
repayment of debts." (Emphasis in original.) Gay, 279 Ill. App. 3d at 145;
see also 750 ILCS 5/505(a)(3)(h) (West 1994).
A review of the record indicates that the judge calculated Robert's
net income from the service station's balance sheet and income statement
prepared by Robert's accountant for the first nine months of 1995. In his
testimony, Robert never explained the basis for the $10,874 depreciation
expense found on this financial document. In fact, Robert testified that he
did not know how to read a financial statement. Also, Robert's accountant
did not testify at the hearings. No other testimony or documents contained
in the record explain the basis for this depreciation expense.
Without deciding whether a depreciation expense may in all cases be
excluded from consideration in determining an individual's available income,
we find that Robert has failed to present evidence that would, under the rule
he proposes, warrant exclusion of that expense. Because no evidence was
offered to explain the basis for the $10,874 depreciation expense noted on
the balance sheet and income statement, we cannot say that the judge in any
event abused his discretion in refusing to deduct this expense in determining
Robert's available income. Cf. In re Marriage of McDonald, 113 Ill. App.
3d 116, 118-19 (1983) (stating that without evidence to establish the
disposition of funds generated through depreciation, a husband failed to
show an inability to pay maintenance).
Robert further argues that the trial judge abused his discretion in
awarding Paula $500 per month in maintenance. In awarding maintenance
to Paula, Robert argues that the judge failed to consider: that Paula was
awarded one half of the marital property; that Paula requires less income to
support a one-person household; the true standard of living established
during the marriage; and that Robert could not afford to pay $500 in
maintenance per month.
Each of Robert's points correspond to a factor listed in section 504(a)
for the court to consider in awarding maintenance. See 750 ILCS 5/504(a)(1)
(income and property of each party, including marital property
apportionment); (a)(2) (needs of each party); (a)(3) (present and future
earning capacity of each party); (a)(6) (standard of living established during
the marriage) (West 1994). The judge stated in both his memorandum
opinion and judgment of dissolution of marriage that he considered the
statutory factors. The judge also found that Paula could not "maintain herself
anywhere near the standard of living enjoyed by the parties during the
course of their marriage without maintenance."
In light of the statutory factors listed in section 504(a) and the
judge's statement that he considered these factors, we are unable to say that
the judge failed to consider the points identified by Robert. In addition, an
award of maintenance is within the discretion of the trial court and will not
be reversed on appeal unless the award constitutes an abuse of discretion or
is against the manifest weight of the evidence. In re Marriage of Phillips,
244 Ill. App. 3d 577, 593 (1993); see also Hoffmann v. Hoffmann, 40 Ill. 2d 344, 349 (1968) (discussing the abuse of discretion standard in regards to
alimony). We cannot say that the trial judge's award of maintenance in this
case was an abuse of discretion.
Robert next argues that the trial judge abused his discretion in
awarding Paula a portion of her trial court attorney fees ($2,731) and a
portion of her prospective appellate attorney fees ($2,000). Robert claims the
judge never found that Paula was unable to pay her attorney fees and also
never found that Robert could afford to pay Paula's fees.
Section 508(a)(3) of the Act provides that a court, after considering
the financial resources of the parties, may order an award of attorney fees,
including fees expected to be incurred in the defense of an appeal. See 750
ILCS 5/508(a)(3) (West 1994). This court has previously stated:
"The awarding of attorney fees and the proportion to
be paid are within the sound discretion of the trial court and
will not be disturbed on appeal, absent an abuse of discretion.
[Citations.] The propriety of an award of attorney fees is
dependent upon a showing by the party seeking them of an
inability to pay and a demonstration of the ability of the other
spouse to do so. [Citations.]" In re Marriage of Bussey, 108 Ill. 2d 286, 299-300 (1985).
A review of the record shows that Paula has a net monthly income
of $1,086 and that Robert has a net monthly income of $3,063. After
considering the $500-per-month maintenance payment made to Paula,
Paula's income is $1,586 per month and Robert's income is $2,563 per
month. Robert has custody of Michael and receives no child support.
Although some evidence of the parties' expenses appears in the record for
the time period prior to their separation, the record contains only brief
mention of the parties' expenses following their separation.
For example, Paula testified during a hearing on her motion for
prospective appellate attorney fees that she does not have the money to pay
her legal bills and that she cannot afford to continue paying $675 mortgage
payments. On cross-examination, Paula stated that she purchased new
carpeting and a couch for the former marital residence where she now lives.
No other evidence establishes Paula's post-separation expenses.
At a hearing on Paula's petition for adjudication of indirect civil
contempt due to Robert's failure to make certain temporary maintenance
payments, Robert testified that he spent more than $1,600 per month in
running his household. Other than a few references to property taxes and
doctor bills, no other evidence regarding Robert's post-separation expenses
is contained in the record.
Thus, in awarding Paula attorney fees, the judge had before him
evidence of the parties' incomes and expenses. At the conclusion of the
dissolution proceedings, the judge awarded Paula $2,731 (or 74%) of her
$3,700 trial court attorney fees. This percentage represents Robert's
proportional share of the couple's net income prior to any maintenance
payments made to Paula. In ordering Robert to pay these fees, the judge
stated that he "[c]onsider[ed] the relative financial circumstances of the
parties and all their income."
Following a subsequent hearing on Paula's motion for prospective
appellate attorney fees, the judge awarded Paula $2,000 (or 66%) of her
estimated $3,000 in prospective fees. This percentage approximates Robert's
proportional share of the couple's net income (62%) after considering
maintenance payments made to Paula. In ordering Robert to pay these fees,
the judge stated that Paula "lacks the financial resources to defend the appeal
brought herein by [Robert]."
It is apparent from the judge's comments that he found that Paula
was unable to pay for all of her prospective appellate attorney fees. The
judge's comments also indicate that he was aware of Paula's and Robert's
financial situations, including their relative incomes and abilities to pay
attorney fees. Given these circumstances, and the fact that the attorney fee
awards proportionally reflect the parties' incomes, we cannot say that the
judge abused his discretion in awarding Paula a portion of her attorney fees.
Robert additionally argues that the trial judge abused his discretion
in distributing the marital property. Robert claims the judge "double
counted" the service station by awarding it to Robert as marital property and
then considering it as the source of Robert's income. Although goodwill was
not considered in the appraisal of the service station, Robert relies on In re
Marriage of Talty, 166 Ill. 2d 232, 236-40 (1995), and In re Marriage of
Zells, 143 Ill. 2d 251, 254-56 (1991), which discuss the goodwill value of
a business and the potential for double counting this asset.
Paula argues, however, that Robert has waived the double-counting
issue by failing to raise it in either the trial or appellate courts. Paula notes
that this issue was raised for the first time during oral argument in the
appellate court by Justice Cook and was addressed only in Justice Cook's
dissent. Even if the issue is not waived, Paula contends that Robert's
reliance on Talty and Zells is misplaced because goodwill has never been an
issue in this case.
In his reply brief, Robert acknowledges that the double-counting issue
was raised for the first time in the appellate court during oral argument and
that he has never raised a goodwill issue. Notwithstanding these facts,
Robert argues that it is important for this court to determine the scope of
double counting in Illinois for reasons of public policy. We disagree.
Issues not raised in the trial court are waived and cannot be argued
for the first time on appeal. In re Marriage of Rodriguez, 131 Ill. 2d 273,
279 (1989). "An exception to this waiver rule is found when an issue of
public importance, decided by the appellate court but not by the trial court,
is presented. Under these circumstances, this court may consider the issue.
[Citation.]" Rodriguez, 131 Ill. 2d at 279. In the case before us, a double-
counting issue has not been decided by the appellate court. Instead, only
Justice Cook in his dissent discusses this issue. See 287 Ill. App. 3d at 1087
(Cook, J., dissenting). Also, in Talty and Zells, this court addressed the
problems regarding the double counting of goodwill. Thus, the exception to
the waiver rule identified in Rodriguez does not apply here and the issue is
waived.
Robert's final argument is that the trial judge abused his discretion
in failing to award Robert 20% of Paula's net monthly income ($217) as
child support. See 750 ILCS 5/505(a)(1) (West 1994) (setting 20% as the
level of support for one child). Robert argues that if the judge wished to
deviate from the statutory guidelines and not require Paula to pay child
support, the judge should have stated a guideline figure and then explained
the reason for any variance with an express finding. See 750 ILCS
5/505(a)(2) (West 1994) ("If the court deviates from the guidelines, the
court's finding shall state the amount of support that would have been
required under the guidelines, if determinable. The court shall include the
reason or reasons for the variance from the guidelines").
Paula, however, argues that Robert has waived the issue of the
judge's failure to make express findings under section 505(a) of the Act by
not raising this issue in the trial court. See In re Marriage of Kern, 245 Ill.
App. 3d 575, 577 (1993); In re Marriage of Harper, 191 Ill. App. 3d 245,
246 (1989). In the alternative, Paula claims that the judge made sufficient
findings in his memorandum opinion as to why he deviated from the
statutory guidelines. Paula acknowledges that the judge did not state the
amount of support that would have been required under the guidelines.
Nevertheless, Paula contends that this oversight should not constitute
reversible error when the figure is easily calculated from the judge's other
findings--20% of Paula's net monthly income of $1,086 yields a $217 child
support figure.
We agree with Paula. Paragraph 7 of the judgment of dissolution of
marriage states:
"The court having considered the net income of the
parties and found that [Paula's] monthly, adjusted net income
is $1,086.26 and [Robert's] monthly adjusted net income is
$3,063.21 and comparing each of the parties' income, taking
into consideration the amount of maintenance [Robert] is
hereby ordered to pay to [Paula], [Robert] has a net income
in excess of that of [Paula] and is not in need of child
support from [Paula] by reason thereof."
These findings explain why the judge did not order Paula to pay child
support to Robert. Thus, "the reason or reasons for the variance from the
guidelines" (750 ILCS 5/505(a)(2) (West 1994)) is included in the judge's
findings.
The judgment of dissolution of marriage also contains Paula's net
monthly income from which the 20% guideline support figure can easily be
calculated. Although we believe the better practice is for a trial judge to
calculate the amount of support that would have been required under the
guidelines, as is provided for in section 505(a)(2), we cannot say that the
judge's failure to do so in this case amounted to reversible error. In light of
the judge's findings and the relative financial circumstances of Paula and
Robert, we find no abuse of discretion in the judge's refusal to award Robert
child support. Because we find that the judge did not abuse his discretion,
we do not address the waiver argument advanced by Paula.

CONCLUSION
For the foregoing reasons, we affirm the judgment of the appellate
court.

Affirmed.