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Appellate Court of Illinois • 1995

In Re Marriage of Hassiepen

646 N.E.2d 1348 | 207 Ill. Dec. 261 | 269 Ill. App. 3d 559 | 1995 Ill. App. LEXIS 101

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Takeaway

In short, this case requires a support determination based on fairly disclosed, fully tested income evidence and prevents a court from penalizing a custodial parent’s reasonable homemaking choice when allocating child-support litigation fees.

Background

Cynthia Hassiepen had custody of the parties’ three children following the 1984 dissolution of her marriage to Kevin Von Behren. Kevin’s support obligation was originally $400 per month and rose by agreement to $500 per month in 1987. In 1991, Cynthia sought an increase, while Kevin sought a decrease and later requested custody. The trial court ultimately left custody with Cynthia, modified visitation, and conducted child-support hearings in 1993.

Kevin operated an electrical-contracting business and income-producing real estate enterprise with his current wife, Brenda. The businesses had substantial reported profits, but Kevin and Brenda had historically commingled personal and business funds, paid themselves low formal salaries, and drew additional money from their joint account as needed. The trial court found the businesses to be Kevin and Brenda’s partnership and treated the corporation as their alter ego. It found Kevin’s monthly net income for support purposes was approximately $4,774, using roughly half of the income reflected in the 1992 corporate and individual tax returns, and raised support to $1,500 per month, partly retroactive.

Cynthia sought attorney fees of $35,165.50 for proceedings after March 1992. The trial court initially denied fees, then awarded only $1,693.75. It reasoned in part that Cynthia was employable, had contributed to delay and discovery problems, and had been held in contempt for interfering with Kevin’s visitation. Cynthia appealed the support determination and the limited fee award.

Issues

Issue #1

Whether the trial court erred in finding that Kevin and Brenda were partners in Von Behren Electric and Von Behren Properties, thereby attributing only one-half of the businesses’ income to Kevin for child-support purposes.

Holding

No. The partnership finding was not against the manifest weight of the evidence.

Reasoning

Whether a partnership exists depends on the parties’ intent as shown by all surrounding facts and circumstances. A partnership may arise when parties join in a venture for their common benefit, contribute property or services, and share a community of interest in its profits. Written partnership formalities are relevant but are not indispensable.

The evidence supported a partnership despite tax filings, titles, business cards, and interrogatory answers that characterized Kevin as sole owner. Kevin and Brenda agreed to start the electrical business together; Brenda’s credit supported its start-up; both contributed substantial services or assets; business receipts went into their joint account; and both used the proceeds for business reinvestment and personal needs.

Brenda’s work was integral rather than merely incidental. She handled office administration, bills, banking, bids, payroll, employees, and equipment, and she gave up court-reporting work to work full-time in the business without a separate wage. The trial court could therefore reasonably find that the parties shared in the businesses’ economic results and operated as partners.

Issue #2

Whether the trial court properly relied on Kevin’s 1992 tax returns to determine his net income and set child support.

Holding

No. The court abused its discretion by denying Cynthia a meaningful opportunity to examine and challenge the late-produced tax returns, by allowing Kevin to invoke the Fifth Amendment while relying on those returns, and by omitting salary income from its calculation.

Reasoning

Child-support modification requires a substantial change in circumstances, and the amount ordinarily follows statutory guidelines unless the court has a reason to depart. Although support decisions are generally discretionary, the court’s calculation must rest on fairly presented and reliable financial evidence.

Kevin withheld meaningful financial information despite Cynthia’s repeated discovery efforts. He did not supply his 1992 tax returns until he was testifying at the hearing, signed them in open court, and had failed to timely file earlier returns. Denying Cynthia’s requested continuance deprived her of a fair opportunity to review the returns and test their accuracy, effectively rewarding Kevin’s obstructive discovery tactics.

Kevin could not rely on his tax returns as proof of income while invoking the Fifth Amendment to avoid relevant cross-examination about their validity, his late filings, and his failure to file earlier returns. He had to choose either to assert the privilege and forgo using the returns as evidence of his income, or to offer the returns and submit to relevant questioning. This limitation applied to Kevin’s use of the returns, not to Cynthia’s ability to use them.

The trial court also miscalculated income even on its chosen evidence. It added corporate taxable income and rental income, divided the result by two because of the partnership, but failed to include Kevin’s salary from the corporation. Because salary paid to Kevin was plainly income relevant to child support, the support order and its limited retroactive award had to be reversed and remanded for new proceedings. Kevin’s discovery conduct was also relevant to reconsideration of retroactive support.

Issue #3

Whether the trial court abused its discretion by awarding Cynthia only $1,693.75 of her requested attorney fees.

Holding

Yes, as to fees related to child-support proceedings; no, as to fees related to custody and visitation proceedings.

Reasoning

Under section 508 of the Illinois Marriage and Dissolution of Marriage Act, attorney fees may be awarded in light of the parties’ relative financial resources, although each party generally bears primary responsibility for his or her own fees. The fee decision is discretionary, but it must rest on supported findings concerning need, ability to pay, and the parties’ conduct.

The court improperly treated Cynthia’s decision to remain at home as a reason to make her bear most of her fees. Cynthia was caring for her preschool-age child as well as coordinating care and activities for the older children. Following the reasoning of In re Marriage of Hensley, the appellate court regarded her homemaking and child-rearing work as the equivalent of full-time income-producing employment for this purpose.

The trial court could properly deny fees attributable to custody and visitation litigation. Cynthia’s willful interference with Kevin’s visitation rights resulted in a contempt finding, and the record supported requiring her to bear the cost of litigation arising from her conduct on those issues.

But the record did not support the finding that Cynthia was responsible for much of the discovery difficulty in the child-support case. Kevin delayed financial disclosures, filed his financial affidavit only shortly before the hearing, produced tax returns in the middle of testimony, and resisted requests without providing meaningful information. The court therefore abused its discretion by making Kevin responsible for only a small portion of Cynthia’s child-support-related fees.

On remand, the trial court was directed first to reconsider the attorney fees Cynthia had already incurred. It was then to address child support and any further fee requests generated by the new proceedings.