Marriage Mowen v. Mowen (In re Re)

2014 IL App (4th) 130795-U

In re: MARRIAGE OF ELIZABETH A. MOWEN, Petitioner-Appellant, and DEAN J. MOWEN, Respondent-Appellee.

NO. 4-13-0795

APPELLATE COURT OF ILLINOIS FOURTH DISTRICT

August 4, 2014

NOTICE

This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).

Appeal from Circuit Court of Adams County

No. 11D76

Honorable Robert K. Adrian, Judge Presiding.

JUSTICE HARRIS delivered the judgment of the court.

Presiding Justice Appleton and Justice Pope concurred in the judgment.

ORDER

¶ 1 Held: (1) The trial court erred in its distribution of property by failing to fully consider the amounts and sources of the husband's income, overstating the husband's debt, and including or excluding specific items of property within its determination of marital property.

(2) The trial court's maintenance determination was inextricably linked with its property award and must also be reversed and reconsidered where the court abused its discretion in distributing property.

(3) The record fails to reflect the trial court applied an improper legal standard when ordering that the husband pay $550 in attorney fees as a discovery sanction.

¶ 2 In March 2013, the trial court entered a judgment for dissolution of marriage, dissolving the marriage of petitioner, Elizabeth A. Mowen (Beth), and respondent, Dean J. Mowen. Later, it entered orders with respect to the division of the parties' marital property and maintenance, and it ordered Dean to pay Beth $550 in attorney fees for violating the court'sdiscovery orders. Beth appeals, arguing the court erred in its (1) distribution of property, (2) maintenance determination, and (3) imposition of sanctions based upon Dean's discovery violations. We affirm in part, reverse in part, and remand with directions.

¶ 3 I. BACKGROUND

¶ 4 The parties were married on March 11, 1983, and have three children, all of whom have reached the age of majority. On March 31, 2011, Beth filed her petition for dissolution of marriage.

¶ 5 In February and March 2013, a trial was held in the matter. Beth, age 47, testified the parties married while she was still in high school. During the course of the marriage, she was the primary caretaker for the parties' three children, Courtney, Carrie, and Mitchell, and took care of the household chores. She stated she also ran a home day care but, in the mid-1990s, she began working outside the home. At the time of trial and for the previous 16 years, Beth worked as a receptionist for Quincy Medical Group. She testified she worked 36 hours per week and received full-time benefits, including health insurance and a 401(k) retirement account. Beth typically worked from 8 a.m. to 5 p.m., except on Thursdays, when she only worked until noon. She acknowledged that in September 2012, she took out a $20,000 loan against her 401(k) account. The record contains Beth's 2012 W-2 form, showing a gross income of $23,462.79.

¶ 6 Dean, age 49 at the time of trial, worked for Prairie Farms Dairy for a number of years until 2008, when the company closed and he lost his job. Thereafter, Dean received unemployment benefits. In approximately May 2012, his unemployment benefits ran out.

¶ 7 During the course of the parties' marriage, Dean also farmed. Initially, he farmed with his father for several years but, in approximately 1993, the parties purchased their ownfarm, which consisted of the marital residence and 138 acres of land. Dean began farming his own land and on rented land. He farmed corn, soybeans, wheat, and sometimes oats. Dean also had livestock. He testified at the time of trial, his sole source of support and income was from farming. The record contains the parties' income tax returns from 2006 through 2012. In 2009, Dean reported gross income from farming of $186,595; expenses totaling $195,632, including depreciation deductions of $86,553; and a net farm loss of $9,037. In 2010, Dean reported gross income from farming of $274,922; expenses totaling $268,233, including depreciation deductions of $132,938; and a net farm profit of $6,689. In 2011, Dean reported gross farming income of $228,642; expenses totaling $276,724, including depreciation deductions of $25,361; and a net farm loss of $48,082.

¶ 8 Dean testified 2012 was a bad year for farming due to weather conditions and stated he was unable to pay off his farm operating loan. That year, he reported gross income from farming of $137,412; expenses totaling $306,823, including depreciation deductions of $38,912; and a net farm loss of $169,411. After 2012, he received crop insurance and stated he used the entire amount he received to pay on his operating loan from First Farm Credit. Dean testified he had three operating loans at First Farm credit, two associated with his farm and one associated with DSM Excavating, Inc. (DSM Excavating), a corporation of which he owned a half interest and was president. Dean testified the corporation's only asset was one bulldozer and he estimated there was approximately $4,000 in its bank account. He acknowledged that in 2012, he received some income from his excavating business.

¶ 9 On March 21, 2013, the trial court entered a judgment for dissolution of marriage, dissolving the parties' marriage. On May 20, 2013, it entered an order with respect to thedistribution of property and maintenance. Initially, the court made findings with respect to each party's income. It found Beth had a gross annual income of $23,462.79, a net annual income of $19,754.09, and a net monthly income of $1,646.17. The court concluded Beth's reasonable monthly expenses totaled $2,650, and she was in need of maintenance.

¶ 10 The trial court noted Dean was a farmer and his income varied greatly from year to year. Looking at Dean's tax returns from 2009 through 2012, and adding depreciation deductions back into his farming income, the court found Dean had "effective income" of (1) $77,516 in 2009; (2) $139,627 in 2010; (3) negative $22,721 in 2011; and (4) negative $130,499 in 2012. The court noted those income amounts did not include "the crop insurance check of $95,447," which Dean received in January 2013. Additionally, it stated that, although Dean listed monthly living expenses of $3,704.85, that amount was "questionable as [Dean] deducts a portion of several of the expenses as business expenses on his taxes."

¶ 11 Next, the trial court noted that the "vast majority" of the parties' assets were related to their farming business. The court found the parties owed "no debt on the farm" and determined the value of the farm real estate was $726,000. It stated the value of the farm equipment as $326,940; the cattle as $46,303; corn as $13,377; soybeans as $12,176.40; hay as $3,080; and intangible farm assets as $48,278. The court valued DSM Excavating at $53,287.02, with Dean's half interest totaling $26,643.51. Additionally, it found the parties had a farm operating loan at First Farm Credit in the total amount of $133,661.98 and a loan at John Deere Credit in the amount of $32,930.35. The court determined the First Farm Credit debt was reduced by the $95,447 crop-insurance payment, resulting in a total farm debt of $71,145.35.

¶ 12 With respect to the division of marital property, the trial court stated as follows:

"The Court finds that the proper division of the marital assets is to award each party 50% of the assets. However, since the vast majority of the assets relate to farming, a 50-50 split of the assets will put [Dean] out of the farming business. Therefore[,] the Court awards [Dean] all of the farming assets including the farm real estate. *** The Court further orders [Dean] to pay [Beth] the amount to equalize the property settlement, enters judgment for that amount, and secures that judgment with a mortgage on the parties' real estate. The real estate has more than enough value to secure the value of the judgment. Further, the interest payments will provide [Beth] with extra income so that she will not need maintenance."

The court determined the total value of all marital property was $1,217,495.10. It awarded Beth specific property, including (1) furniture, personal property, and jewelry ($12,625); (2) her 401(k) retirement account ($46,533.08); (3) a bank account ($11,466.19); and (4) a Pioneer Investments account ($27,662.33). It also ordered her to pay debt, including (1) the loan associated with her 401(k) account ($20,000) and (2) amounts owed on her credit card ($4,217.38). The value of the specific items of property awarded Beth, minus the debts allocated to her, totaled $74,069.22.

¶ 13 The trial court awarded Dean specific property, including (1) the farm real estate ($726,000), (2) farm equipment ($326,940), (3) intangible farm assets ($48,278), (4) cattle ($46,303), (5) corn ($13,377), (6) soybeans ($12,176.40), (7) hay ($3,080), (8) furniture andpersonal property ($5,290), (9) a Roth individual retirement account ($3,830.92), (10) a life insurance policy ($1,471.46), (11) a bank account ($2,631.64), and (12) his half interest in DSM Excavating ($26,643.51). It ordered him to pay debt owed (1) to First Farm Credit ($38,214.98), (2) to John Deere Credit ($32,930.35), and (3) on his GM credit card ($1,450.72). The property awarded to Dean, minus the debt allocated to him, totaled $1,143,425.88.

¶ 14 The trial court then ordered Dean to pay Beth $534,678.33 (half the total marital estate minus the $74,069.22 in specific items of property awarded to Beth) and entered judgment on that amount. It also ordered as follows:

"[Dean] shall pay interest on the judgment at the rate of 3.75% over 15 years. [Dean] shall pay the interest monthly and shall make principle [sic] payment semi annually. [Dean] shall grant [Beth] a mortgage on the real estate to secure the debt. [Beth's] attorney shall prepare a commercially accepted mortgage that shall provide for all enforcement remedies upon default including, but not limited

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