Gan v. Gan (State Report Title: In re Marriage of Gan)

• Decision Date: 20 March 1980
• Docket Number: No. 79-251,79-251
• Citation: 404 N.E.2d 306,38 Ill.Dec. 882,83 Ill.App.3d 265
• Parties: , 38 Ill.Dec. 882 Vernon GAN, Petitioner-Appellant, v. Cleta GAN, Respondent-Appellee.
• Court: United States Appellate Court of Illinois

Page 306

404 N.E.2d 306

83 Ill.App.3d 265, 38 Ill.Dec. 882

Vernon GAN, Petitioner-Appellant, v. Cleta GAN, Respondent-Appellee.

No. 79-251.

Appellate Court of Illinois, Fifth District.

March 20, 1980.

Rehearing Denied May 20, 1980.

Steven N. Mottaz, Thomas, Mottaz & Eastman, Alton, for petitioner-appellant.

Meyer & Meyer, Greenville, for respondent-appellee.

JONES, Presiding Justice:

The marriage of the parties, Vernon and Cleta Gan, was dissolved and in a subsequent hearing disposition was made of their property. From the order of disposition of property and a subsequent modification thereof the husband appeals. He raises three issues: (1) whether the proceeds of the sale of real property were properly considered marital property where the husband had paid a mortgage on that property by using part of his settlement of a personal injury action; (2) whether the trial court erred in dividing the proceeds of the sale of real property without considering the marital debts; and (3) whether the wife sustained her burden of proving that she was entitled to maintenance or to an apportionment of marital property in lieu thereof.

The parties were married September 2, 1950. In 1965 they purchased an 85-acre farm, taking the title jointly. In 1973 the husband was disabled as a result of personal injuries received in an automobile accident. In 1976 he received a settlement of his claim for personal injuries and disability in the amount of approximately $31,000. At that time a mortgage on the farm was being foreclosed. As a consequence, the husband applied about $26,000 of his settlement to the balance of the mortgage to prevent foreclosure. The remainder of the settlement was spent on other marital debts and expenses.

The husband moved out of the marital home early in January 1978, and on March 16, 1978, filed for dissolution of the marriage on the ground of mental cruelty. The wife counterclaimed for dissolution on the ground of adultery, and the marriage was dissolved on the counterclaim on July 5, 1978. On August 4, 1978, the husband remarried.

On September 12, 1978 a hearing was held regarding child support and property settlement. At the hearing the husband testified that he was 47 years old and unemployed. He receives an employment derived monthly retirement pension in the amount of $321.99 as well as monthly social security disability benefits in the amount of $396.70. He receives an additional $106 in monthly social security benefits for each of two minor children. The wife testified that she was 47 years old and unemployed, having remained at home during the 27-year marriage in accord with her husband's expressed preference. She has completed the junior year of high school. She worked once for a period of 3 to 4 months as a nurse's aide the year after her husband's accident in order to make money for Christmas expenses. Twenty years ago she gave organ lessons and apparently has played the organ in churches for remuneration from time to time.

The wife calculated her monthly expenses for herself and the two minor children who live with her as $990. She appears to have no assets.

Four sons were born of the marriage. Two were minor children, aged 13 and 16 at the time of the hearing, who apparently do not contribute to their own support. A third son, aged 20, also lives at home with his mother. He appears to have suffered brain damage as the result of a fever at the age of 13 and has since been virtually unable to read or write. He is employed as the operator of a machine which crushes cars and contributes to the household expenses when his mother's monthly funds run low by paying the telephone bill or buying groceries. The fourth son is 27 years old, married and living in his own home.

Prior to the hearing the farm was sold by agreement of the parties for $65,000. After the payment of expenses, encumbrances and taxes with penalties, the amount realized from the sale was $37,910.81.

At the hearing the husband testified regarding various items of personalty. The husband had apparently purchased many of these items with the intention of repairing them but had not yet done so. The titles to the more valuable items were encumbered. The value of many was not determined. The wife did not testify to the value of any of these items. The items of personalty included: a Taurus travel trailer for which the husband paid $5,170 in July 1977, which is subject to a lien in the amount of $2,581.93; an OMC ski boat and trailer for which the husband paid $1,895 in August 1977, which is subject to a lien in the amount of $1,862.44; a 1972 Ford pickup truck mortgaged for $1,000; a 1962 Chevrolet pickup truck which has not run for 2 years for which the husband paid $200 5 to 6 years ago; a camper shell for which the husband paid $150, intending to restore it for use with the 1962 Chevrolet pickup truck; a Catapal earth mover which does not run, valued by the husband at $500; citizens band radio equipment valued by the husband at about $50; hand and power tools of unspecified value; lumber valued by the husband at about $50; a Rototiller of unspecified value; a riding lawn mower in need of a transmission for which the husband paid $450; a 1970 Dodge Challenger automobile which actually belongs to the 20-year-old son; a 1976 Kawasaki motorcycle purchased for the 20-year-old son; a 1965 Chevrolet Corsair automobile which has not run for 2 or 3 years; a 1965 Ford Mustang automobile which is in need of an engine and which belongs to the 16-year-old son. The husband testified at the hearing that the loan secured by the 1972 Ford pickup truck was obtained by him in mid-August of 1978 and was used to pay expenses of not only his first marriage but his second marriage as well. There was no evidence of any other assets of the husband.

In addition to the encumbrances mentioned above, it was brought out that other debts included a grocery bill of about $600, a light bill for the farm of $146, a gasoline bill of $216, a medical bill of $131 and an employee credit union loan dating from 1974, said by the husband to be in the amount of $5,000. A complaint filed in August 1977, by the credit union against the husband for the amount of that loan outstanding was attached to the brief which the husband submitted in support of his contentions made at the hearing. In that suit the credit union sought from the husband the amount of $3,510.62, which included over $700 interest on the obligation with interest to accrue after August 11, 1977, at the rate of 93 cents a day. Attorney's fees of 25% of principal and interest at the time of entry of judgment were also sought. No payments had been made on the debt since September 1975. It was established at the hearing that the household furnishings and furniture consist of four rooms of furniture acquired early in the marriage and basic appliances including a washer and dryer, a 3-year-old freezer and a 4-year-old color television set. They also include a dishwasher and a 27-year-old Hammond organ.

In an order filed October 12, 1978, the court found that the farm and proceeds from the sale thereof were marital property. It also found that neither party was entitled to maintenance. The court awarded to the wife the amount of $37,910.81, representing the proceeds of the sale of the farm, together with the household furnishings and furniture. To the husband the court awarded the other items of personalty listed above. The husband was ordered to pay the $600 grocery bill, $100 of the wife's attorney's fees, and to pay child support in the form of the monthly social security payments of $106 for each minor child.

In a post-trial motion filed October 23, 1978, the husband asked that the judgment be set aside and that a new trial be granted for three reasons. He claimed that the award to the wife of $37,910.81 as the proceeds of the sale of the real estate was in violation of section 503 of the "Divorce Act" (Ill.Rev.Stat. 1977, ch. 40, par. 503). The husband claimed, too, that the order requiring his payment of the grocery bill was improper and inequitable and that the court failed to provide for payment of the loans on the Taurus camper and the OMC boat and trailer and the loan from the credit union.

In an order entered April 23, 1979, the husband's post-trial motion was allowed in part whereby he was granted $4,000 of the proceeds of the sale of the real estate with the balance of $33,910.81 awarded to the wife. The order also modified the finding of the order of October 10, 1978, that the wife was not entitled to maintenance. The post-trial motion was otherwise denied in its entirety. From the order of April 23, 1979, and the order of October 10, 1978, the husband appeals.

The husband contends that the approximately $26,000 paid by him out of the settlement of his personal injury claim to prevent foreclosure of the mortgage was non-marital property and remained so after the sale of the farm so that he is entitled to it as his separate property. The issue of whether property received by a spouse as the result of an action for personal injury constitutes marital property has not been addressed by an Illinois court. There is no indication in the record that the personal injury settlement was apportioned in any way so as to compensate the husband expressly for his pain and suffering, for example, or for out-of-pocket expenses or for the loss of his future earnings.

Section 503 of the Marriage and Dissolution of Marriage Act (Ill.Rev.Stat. 1977, ch. 40, par. 503) (hereinafter, the Act), provides in pertinent part:

"(a) For purposes of this Act, 'marital property' means all property...