In re Roepenack

966 N.E.2d 1024

In re MARRIAGE OF Chat T. ROEPENACK, Petitioner–Appellant, and Kathleen L. Roepenack, Respondent–Appellee.

No. 3–11–0198.

Appellate Court of Illinois, Third District.

March 2, 2012.

Derek Schroen (argued), Benckendorf & Benckendorf, PC, Peoria, for Chad T. Roepenack.

David M. Lynch (argued), Lynch & Bloom, Peoria, for Kathleen L. Roepenack.

Presiding Justice SCHMIDT delivered the judgment, with opinion.

¶ 1 On August 12, 2009, the trial court entered a judgment dissolving the marriage of petitioner, Chad T. Roepenack, and respondent, Kathleen L. Roepenack, and incorporating the parties' marital settlement agreement. On May 12, 2010, Kathleen filed a petition under section 2–1401 of the Code of Civil Procedure for relief from judgment ( 735 ILCS 5/2–1401 (West 2008) ), alleging that portions of the judgment were unconscionable and procured by fraud. The trial court granted Kathleen's petition and vacated provisions of the parties' marital settlement agreement (judgment). Chad appeals from the trial court's order granting Kathleen's petition for relief from judgment, arguing that the trial court erred in: (1) finding that the marriage settlement agreement was unconscionable; and (2) admitting a business appraisal into evidence. We affirm.

¶ 2 FACTS

¶ 3 The parties married on February 10, 2000. Children were born August 15, 2001, and April 19, 2005. On June 16, 2009, Chad filed a petition for dissolution of marriage alleging that Kathleen was guilty of extreme and repeated mental cruelty. In the petition, Chad requested custody of the minors subject to Kathleen's visitation, child support, and a division of the marital and nonmarital property. On July 2, 2009, Kathleen and Chad signed a marital settlement agreement and a joint-parenting agreement, at which time Kathleen was unrepresented by counsel and Chad was represented by counsel. Kathleen also signed an entry of her appearance in the case and waived any further notice.

¶ 4 On August 12, 2009, Chad and his attorney attended a prove-up hearing for entry of a judgment of dissolution of marriage. Kathleen was neither present at the hearing nor represented by counsel. Chad testified that his 2008 income was $100,000. (This testimony was ultimately proven false.) The trial court entered a judgment for dissolution of marriage, incorporating the terms of the parties' marital settlement agreement dated July 2, 2009.

¶ 5 Under the terms of marital settlement agreement, Chad was awarded all interest in the businesses, CT Rope Co. (CT Rope) and Rope & Clark JJ Development Co. (Rope & Clark). Kathleen was awarded the marital home and was required to pay $13,000 into the minors' college fund. Each party was awarded all interest in his/her own respective pension and retirement programs, checking and savings accounts, and life insurance policies.

¶ 6 Chad was given sole possession and responsibility for the lease payments on the parties' Toyota Tundra. Kathleen was to receive the title to the parties' Land Rover prior to the entry of judgment of dissolution. Kathleen would be responsible for the $933 monthly payment on the Land Rover but would be entitled to $475 of additional maintenance while she was making payments. The Land Rover would be transferred to Chad on July 1, 2010, with Chad responsible for the remaining debt, or Kathleen could transfer the Land Rover to Chad at anytime prior thereto.

¶ 7 Chad was required to pay for three semesters of college for Kathleen as a loan, which Kathleen was to repay into the minors' college fund within seven years. The minors' $10,000 college fund was to be administered by Chad and would be used toward Chad's contribution to the minors' college expenses. Chad was required to pay $531.59 in child support every two weeks. Kathleen would receive $2,833 per month in maintenance, which would be reduced to $1,417.50 per month after the second year, and terminate after the third year. After the initial six months, Kathleen's maintenance would also be reduced by 75% of her net income. The parties' joint custody of their two minor children was subject to the terms of the joint-parenting agreement.

¶ 8 On May 12, 2010, pursuant to section 2–1401 of the Illinois Code of Civil Procedure, Kathleen filed a petition to reopen or vacate the marital settlement agreement, alleging fraudulent concealment and misrepresentation on Chad's part. Specifically, the petition alleged that Chad knowingly misrepresented his 2008 gross income as $100,000 on a child support calculation sheet that he had provided to Kathleen. Kathleen also alleged that Chad failed to disclose the value of the businesses and did not inform her that there was a valuation that could be assigned to the ownership of the businesses that exceeded $1 million. Kathleen alleged that as a result of the marital settlement agreement, Chad received assets in excess of $1 million while she received less than $50,000 worth of assets.

¶ 9 Evidence at the hearing on Kathleen's petition indicated that the parties' corporations, consisting of Jimmy John's franchises, were formed during the marriage. In 2000, when the parties married, Chad was the general manager of a Jimmy John's franchise and then an area manager of multiple franchises. In 2003, the parties purchased a franchise in Pekin, Illinois, for $158,000 from their marital assets. In May 2004, the parties purchased another franchise in Lincoln, Illinois, for $125,000 from their marital assets. The Pekin and Lincoln franchises were incorporated into CT Rope.

¶ 10 In June 2006, Chad brought in a partner, who paid $180,000 for a 35% share of CT Rope. Chad and his partner also formed a 50/50 partnership as Rope & Clark and purchased a franchise in Morton, Illinois, for $290,000. They later purchased another franchise under Rope & Clark in East Peoria, Illinois, for $340,000. Chad testified that at the time of the parties' dissolution in 2009, CT Rope was $108,000 in debt and Rope & Clark was $340,000 in debt.

¶ 11 Until September of 2006, Kathleen did the accounting for the businesses. In 2007, Kathleen became employed as a cheerleading coach for a junior high school, earning $3,000 per year, and was no longer involved in the businesses.

¶ 12 Although Kathleen was no longer involved in the operation of the businesses, on June 25, 2008, she cosigned for a business loan in the amount of $108,668 at Chad's request. On February 26, 2009, she cosigned for another business loan in the amount of $310,000 in anticipation of Chad purchasing the East Peoria franchise.

¶ 13 In April of 2009, the parties discussed getting divorced. In discussing child support, Chad e-mailed a document, prepared by his attorney, to Kathleen indicating that his gross income for 2008 was $100,000 and his net income was $70,516.75. The documents showed that Kathleen was entitled to 28% of Chad's net income as child support for two children in the amount of $19,775 per year "[l]ess 30% deviation due to amount of time with kids." According to the child support calculation sheet, the resulting child support that Chad owed Kathleen was $13,821.28 per year or $531.59 every two weeks.

¶ 14 Chad testified that during the marriage settlement discussions, the parties had specifically discussed that Chad's 2008 income was approximately $190,000. According to Chad, the parties agreed that child support would be based on a salary of $100,000 per year because that was the amount of income the parties were living on, while the remainder of their income was invested back into the businesses. Chad testified that the parties agreed that child support would be increased after Kathleen's maintenance terminated and that additional restaurants could be purchased to help Kathleen and the minors in the future. Chad testified that the trial court had not specifically approved of the child support deviation and was not informed of Chad's actual income of $211,000.

¶ 15 During their marriage, the parties filed a business tax return by March 15 each year and their personal tax return by April 15 each year. In 2009, Chad filed the parties' 2008 joint tax return on September 17, 2009, which was 38 days following the entry of the dissolution of marriage order. It was not until that day that Kathleen saw and signed the parties' 2008 tax return. Chad testified that the 2008 tax return was filed late because his partner was redoing their accounting. The parties' 2008 tax return, which was filed more than 30 days after the dissolution judgment, indicated that Chad's income was $211,000, based on Chad's personal salary of $71,000 and the corporations' income of $140,000. Kathleen's salary was $2,104.

¶ 16 During their marriage, the parties had a joint account out of which Kathleen paid their personal expenses. Chad had a business savings account, in which quarterly distributions from the businesses were deposited. Out of the business savings account, the parties paid for their vehicles, mortgage, debt, and vacations. Kathleen had no authority on the business savings account. Kathleen had a personal account that Chad deposited $400 per month into for Kathleen to "do whatever she want[ed] with."

¶ 17 All the paperwork for the businesses was kept in the sunroom of the parties' marital home until Chad moved out in May of 2009. Chad testified that Kathleen knew where the documents were located and they were never locked. Chad testified that he and Kathleen discussed his annual salary, and she had always known the amount of his real income. Chad testified that he discussed the progress of the businesses on a daily basis with Kathleen and that he "constantly told her how [they] were doing."

¶ 18 Kathleen testified that she received half the equity in the home and some personal property in the home in consideration for transferring her interest in the four franchises to Chad. Kathleen testified that at the time of the parties' dissolution, there was $30,000 in equity in the marital home of which she agreed to pay...