As covered in our CFL course, complicated financial issues in a divorce aren’t always about who you know – they’re more about what you know.
When several financial matters come to a head, they can lead to some lengthy litigation. Among the issues in the Illinois appeals case of Re: Marriage of Hamilton, the court decided on whether a lack of property valuation evidence was an abuse of discretion, the child’s horse-related expenses should be paid, and if the ex-husband had dissipated over $160,000.
The Hamiltons married in 1988. Katelyn, the only child who was still a minor during the divorce proceedings, was born in 2000. In 2010, the couple bought two horses to help improve her equestrian skills.
Mary and Don also owned two properties: their marital home and a rental house next to it. Don moved out of their home in November 2010 but returned in the summer of 2012. He left again three months later and filed a petition for divorce in February 2013.
In December 2013, the court ordered Don to pay child support and certain debts the couple owed. The court denied Mary’s requests for temporary maintenance and interim attorney’s fees, but it decided she would keep all of the rental income.
At trial, Mary presented spreadsheets which she argued made a prima facie case for dissipation of marital funds. She showed that from 2010 through the first half of 2016, Don withdrew over $160,000 that wasn’t accounted for from his bank accounts. Her reasoning included an analysis of his stated living expenses compared to the withdrawals shown on his bank account statements. He didn’t testify but argued that Mary hadn’t met her burden of providing a prima facie case for dissipation. The trial court agreed there was no prima facie case, or enough evidence to establish a fact or raise a presumption unless disproved or rebutted.
The trial court dissolved the marriage in May 2017. It found that Katelyn’s interest in horses didn’t constitute an extracurricular activity, so Don didn’t have to pay the expenses for her activities. The court ordered the couple to sell their properties and divide the proceeds after they paid any remaining debts.
Both parties filed motions to reconsider, which the court denied, and then they appealed.
Illinois Fifth District Court of Appeals Ruling
On the issue of the dissipation, based on the reduction of the marital estate, the appellate court held that it can also be founded on evidence a spouse withdrew funds that far exceeded their living expenses over a period of months or years. The court also decided that Mary didn’t meet her burden of proving when the marriage began undergoing an irretrievable breakdown. Therefore, she was limited to claiming dissipation at the time of the couple’s separation.
“Because we have concluded that Mary made a prima facie showing of dissipation for the period from November 2010 through July 2016, we must remand the matter to the trial court to allow Don the opportunity to refute the charge of dissipation.”
Regarding the court-ordered sale of the marital and rental homes and division of the proceeds as an abuse of discretion without competent valuation evidence, the appeals court upheld the decision. At trial, neither party presented the court with expert testimony on the marital and rental properties’ values. While Don testified about the combined values and Mary provided evidence for their assessed values based on real estate taxes, they gave their opinions two years before the judgment. Because of the lack of relevant valuation evidence, the appellate court ruled the trial court didn’t abuse its discretion in ordering the sale of the properties and division of the proceeds.
On the matter of Katelyn’s horse-related expenses and activities, the appeals court reversed the ruling that the activities weren’t extracurricular. It based much of its decision on whether extracurricular activity expenses are intended to enhance a child’s educational, athletic, social, or cultural development.
“Where, as here, a trial court fails to exercise its discretion due to an erroneous conclusion that it has no discretion, its decision must be reversed. In re Marriage of Wisniewski, 286 Ill. App. 3d 236, 243 (1997). We must, therefore, reverse the portion of the court’s order finding that the activities related to Katelyn’s interest in horses were not extracurricular activities. On remand, the court must determine whether all or some portion of those expenses are reasonable and whether, in the exercise of its discretion, Don should be ordered to contribute to those expenses.”
Our CFL course teaches you about these and other tricky financial matters in divorces. Find out why successful case resolution isn’t about who you know, but what you know in our free information packet today.