Marriage Walden v. Walden (In re Re)

2015 IL App (4th) 140224-U

In re: MARRIAGE OF RACHAEL WALDEN, Petitioner-Appellee and Cross-Appellant, and SCOTT WALDEN, Respondent-Appellant and Cross-Appellee.

NO. 4-14-0224

APPELLATE COURT OF ILLINOIS FOURTH DISTRICT

August 11, 2015

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 Piatt County

No. 10D40

Honorable Dan L. Flannel, Judge Presiding.

JUSTICE HOLDER WHITE delivered the judgment of the court.

Justices Harris and Steigmann concurred in the judgment.

ORDER

¶ 1 Held: The appellate court (1) affirmed (a) the trial court's division of marital property, (b) the court's award of the income-tax exemptions for the parties' minor children, (c) the court's child-support arrearage calculation and credit to respondent for payments made directly to petitioner, (d) the court's refusal to modify respondent's child-support obligation based on his unemployment; but (2) reversed the trial court's judgment inequitably allocating the marital debts and considering respondent's criminal restitution obligation a marital debt.

¶ 2 In May 2012, the trial court entered a judgment dissolving the marriage of petitioner, Rachael Walden, and respondent, Scott Walden. The judgment resolved the grounds for the dissolution but reserved all ancillary issues, including child custody and visitation determinations, child support, maintenance, and the division of marital property. In November 2013, the court entered its judgment on the ancillary issues.

¶ 3 Scott appeals, arguing the trial court abused its discretion by (1) allocating Scott 80% of the marital debt and allocating only 20% to Rachael; (2) refusing to award Scott his personal property; (3) sua sponte awarding Rachael the dependency tax exemptions for all three minor children; (4) failing to credit Scott for $4,118.51 in child support paid directly to Rachael; and (5) refusing to modify Scott's child-support obligation on the basis of his unemployment. Rachael cross-appeals, arguing the court abused its discretion in allocating Rachael 20% of Scott's business debts and criminal restitution. We affirm in part, reverse in part, and remand with directions.

¶ 4 I. BACKGROUND

¶ 5 The parties were married in June 2000 in Charleston, South Carolina. The parties had three children: D.W., age 14; R.W., age 13; and C.W., age 10. The parties lived in Ohio at the time they were married and moved to Monticello, Illinois, in 2007 or 2008. In October 2010, Rachael filed a petition for dissolution of marriage. In May 2012, the trial court entered a judgment resolving the grounds for the dissolution of marriage and reserving all ancillary issues, including child custody and visitation determinations, child support, maintenance, and the division of marital property.

¶ 6 In September and October 2012, the trial court held a three-day trial relating to these ancillary issues. There is no report of proceedings or transcript for this three-day trial in the record. Following the third day of trial, the court ordered the parties to submit written arguments regarding custody and visitation. The court ultimately awarded Rachael custody of the three minor children and granted Scott visitation. The court alerted the parties as to the custody determination through an October 2012 memorandum, hoping "that once the parties and counsel have digested the [c]ourt's decision concerning custody[,] the remaining issues [were] readilyamenable to resolution between the parties." Thereafter, the court reopened proofs and held an October 2013 evidentiary hearing to address financial issues, including the division of marital property and Scott's purported child-support arrearage. The record contains a transcript of this hearing. We recount only the facts necessary for resolution of this appeal.

¶ 7 A. Marital Debt

¶ 8 At the time Rachael filed the petition for dissolution of marriage, Rachael was a registered nurse working for Kirby Hospital and the Piatt County Nursing Home. Scott was employed as a union electrician. Scott worked for Bullock Garages and started a side business, Walden Services. When Scott's job with Bullock Garages ended, in April 2010, Scott was charged with seven felony counts, including two counts of home-repair fraud, three counts of forgery, and two counts of theft by deception. In August 2011, Scott pleaded guilty to aggravated home-repair fraud and received 48 months' probation. He was ordered to pay $81,730 in restitution.

¶ 9 At the October 2013 hearing on financial issues, Scott testified the parties both deposited their income into a joint checking account, which Rachael used to pay the family's bills. Scott testified the parties had numerous outstanding marital debts, collected in respondent's group exhibit No. 5. Scott also testified respondent's group exhibit Nos. 6 and 7 included copies of various bills for debts incurred during the course of the marriage. The bills in exhibit No. 5 include, among others, Comcast, hauling services, Time Warner, taxes owed to the State of Ohio, Dish Network, Schoonover Sewer Service, Terminix, Berg Tanks, Staley Concrete, the Vermilion County State's Attorney Bad Check Restitution Program, various credit cards, hospital bills, and money Scott owed to the Illinois Department of Employment Security. The maritaldebts outlined by Scott included the $81,730 owed in restitution for his aggravated-home-repair-fraud conviction.

¶ 10 Scott testified all the debts were for items or purchases necessary during the marriage. Rachael testified she had never seen many of the bills contained in exhibit No. 5—some of the bills were for Scott's side business, and some were related to Scott's felony conviction. In her proposed judgment, Rachael denied the existence of any remaining marital debt.

¶ 11 The trial court found:

"[T]he evidence presented concerning ultimate responsibility for said debts is conflicting, and due to the period of separation of the parties, difficult to individually assign responsibility. Therefore, the [c]ourt has determined to allocate responsibility for all indebtedness on a percentage basis between the parties. In view of the [c]ourt's distribution of assets, it is the [c]ourt's finding and it is ordered that the [r]espondent be responsible for 80 percent of all outstanding indebtedness and the [p]etitioner be responsible for 20 percent of all outstanding indebtedness incurred during the marriage and up through the date of separation of the parties."

Rachael filed a motion to reconsider, alleging the court "miscategorized [sic] the fines and penalties to be paid by Scott Walden" in connection with his felony conviction. At the hearing on the motion, Rachael raised the question of whether the court intended to order her to pay 20% of Scott's criminal restitution and business debts. The court denied the motion to reconsider without specifically addressing this question.

¶ 12 While this appeal was pending, Scott filed for bankruptcy. This court stayed proceedings until a notice of discharge was filed in January 2015. Scott, in his reply brief, acknowledges some debts were discharged and some debts were not. Scott further acknowledges this "complicates" matters, but he does not indicate what debts were discharged or considered by the bankruptcy court.

¶ 13 B. Personal Property

¶ 14 In September 2010, Rachael obtained an emergency order of protection against Scott. According to Scott, because of the order of protection, he did not have an opportunity to collect various belongings, including furniture, electronics, tools, and various gifts he received. At the October 2013 hearing, Rachael testified she did not have any of Scott's belongings in her possession. In pertinent part, the judgment on ancillary issues provides: "Each of the parties is awarded that personal property now in their respective possession and there shall be no order directing either party to return property to the other."

¶ 15 C. Dependency Tax Deductions

¶ 16 In January 2012, Scott filed a petition requesting the trial court award him the dependency tax exemptions for all three children for his 2011 taxes. Scott alleged Rachael filed her taxes for 2010 and claimed all three children without notifying Scott. In March, Scott filed a petition alleging Rachael filed her 2011 taxes and again claimed all three dependent children. Scott requested the court order Rachael to pay Scott half the difference between her 2010 and 2011 income tax returns and Scott's 2010 and 2011 income tax returns. A hearing was set to address this matter, along with multiple other motions Scott filed, in March 2012. An agreed order entered after the March 2012 hearing is silent as to the tax returns.

¶ 17 In December 2012, Scott filed a motion alleging Rachael claimed all three children on her 2010 and 2011 taxes and requesting the court grant him the three exemptions on his 2012 taxes. At a December 2012 hearing, the trial court instructed both parties to refrain from filing taxes for the year 2012 until the court resolved the dependent-exemption issue. The clerk's minutes for May 22, 2013, read: "Conference conducted in chambers with counsel and the court. Arguments heard and considered regarding the income tax exemptions for the minor children. Respondent awarded the income exemptions for [C.W.] and [R.W.] for 2012 and the future years. Petitioner is granted the income exemption for [D.W.] for 2012 and future years."

¶ 18 In her closing argument on ancillary issues, filed in June 2013, Rachael asserted Scott was behind on child-support payments and unemployed, and Rachael requested the trial court award her the income-tax exemptions for all three minor children. In his response, Scott alleged Rachael filed her 2012 taxes in April 2013 and claimed all three dependent exemptions. Scott requested the court order Rachael to refile her taxes and release the exemptions to him. In the...