Heinrich v. Counter

• Decision Date: 19 March 2014
• Docket Number: No. 2–12–1333.,2–12–1333.
• Citation: 380 Ill.Dec. 26,2014 IL App (2d) 121333,7 N.E.3d 889
• Parties: In re MARRIAGE OF Mary Lee HEINRICH, Petitioner and Counterrespondent–Appellee, and Paul Heinrich, Respondent and Counterpetitioner–Appellant.
• Court: United States Appellate Court of Illinois

2014 IL App (2d) 121333

7 N.E.3d 889

380 Ill.Dec. 26

In re MARRIAGE OF Mary Lee HEINRICH, Petitioner and Counterrespondent–Appellee, and Paul Heinrich, Respondent and Counterpetitioner–Appellant.

No. 2–12–1333.

Appellate Court of Illinois, Second District.

March 19, 2014.

Michael J. Scalzo, Todd D. Scalzo, Scalzo Law Offices, Wheaton, for appellant.

Keith E. Roberts, Jr., Joseph P. O'Brien, Roberts P.C., Wheaton, for appellee.

OPINION

Justice JORGENSEN delivered the judgment of the court, with opinion.

¶ 1 Petitioner, Mary Lee Heinrich, filed a petition for dissolution of her marriage to respondent, Paul Heinrich. Subsequently, respondent filed a motion for declaratory judgment, seeking a general determination of the parties' rights under their premarital agreement. The trial court declared the parties' premarital agreement valid and enforceable. It subsequently denied respondent's motion to reconsider, which was brought 17 months later, and found that there was no just reason to delay enforcement or appeal or both pursuant to Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010). Respondent appeals, arguing that the trial court erred in: (1) declaring that the premarital agreement's attorney-fee-shifting ban was valid as to child-related issues; (2) denying respondent's motion to reconsider for untimeliness and lack of new facts; and (3) declaring the premarital agreement valid and enforceable. We affirm in part, reverse in part, and remand the cause for further proceedings.

¶ 2 I. BACKGROUND

¶ 3 The parties were married on May 26, 2001. Petitioner was 36 years old and employed at her father's company. Respondent was 44 years old and self-employed as an attorney. He also had an ownership interest in an airplane rental and charter business. Prior to their marriage, on May 25, 2001, they signed a premarital agreement. The agreement states that each party's estate has approximately the same value and that petitioner's estate “ is expected to increase through gifts to her or inheritances received from members of her family.” Financial disclosure exhibits attached to the agreement list the parties' assets, liabilities, and net worth. Petitioner's exhibit lists net assets of over $1.9 million (including her interests in various family-owned businesses, listing McKelvey Homes of Missouri, LLC (valued at $405,900), but not including McKelvey Rental, LLC, which is at issue in this appeal) and no liabilities. In 1999, her adjusted gross income was $383,445, and, in 2000, it was $279,358. An item described as “Anticipated Inheritance” lists the value as “Amount undetermined.”

¶ 4 Respondent's exhibit reflects a net worth of $620,000. His income in 1998 was $380,000; in 1999, it was $180,000; and his estimated 2000 income is listed as $130,000.

¶ 5 As to attorney fees, section 6.9 of the premarital agreement states:

“If either party contests the validity of this Agreement, and the Agreement is held valid, the contesting party shall be liable for and pay the other party's legal fees and expenses, however, either party can seek judicial interpretation of the meaning of this Agreement if it appears ambiguous as long as they overtly and explicitly accept the validity of the Agreement, in which case each pays his or her own legal fees and expenses.”

¶ 6 The agreement also provides, in section 4.2(d) (which is at issue here), that, if the parties' marriage is dissolved or in the event of a legal separation:

“Neither party shall make any claim upon the other for costs or attorneys' fees whether pendente lite or final, incurred in seeking or obtaining any such order or decree, notwithstanding any right to costs or attorneys' fees a party otherwise may have pursuant to any statute of any jurisdiction * * *.”

¶ 7 The premarital agreement further states that, in the event of divorce, each party would keep sole ownership of his or her own separate property and the parties would equally divide the shared property, regardless of their respective contributions to the shared property during the marriage. Shared property is defined as: (1) all property acquired by the parties during the marriage and jointly titled or titled as tenants by the entireties; (2) tangible personal property that has no formal ownership designation and is acquired during the marriage for joint use and enjoyment; (3) wages and earned income received by the parties during the marriage, including nonpassive income from any partnership or business; (4) all investments, savings, or other property, whether tangible or intangible, acquired by the parties with wages or other earned income; and (5) retirement accounts, to the extent they are funded with income earned by either party during the marriage. Separate property is defined as property that: (1) belongs to either party at the commencement of the marriage as reflected in the exhibits; (2) is acquired by either party during the marriage by gift, devise, bequest, descent, inheritance, or like acquisition; (3) is acquired by either party during the marriage and placed or maintained in his or her separate name or account, but excluding any property derived from either party's earned income during the marriage; or (4) is acquired by either or both parties during the marriage and is not shared property. However, the agreement provided that, since respondent would pay the mortgage for his Wisconsin residence from his earned income ( i.e., shared property), petitioner could claim an offset by transferring equal amounts of her earned income into her own separate property. Also, if petitioner stopped working in order to raise children, she would instead receive an equity interest in respondent's Wisconsin residence equal to one-half of his mortgage payments. (The agreement, however, did not contain a reciprocal provision allowing respondent to claim an offset for any expenses petitioner might pay with her earned income for her ownership of a Missouri residence and her one-third interest in a Missouri farm.)

¶ 8 The agreement also states that the parties would be barred from seeking maintenance against each other, unless petitioner stopped working in order to raise children, in which case she could seek rehabilitative maintenance for up to two years. The agreement further states that each party was represented and advised by separate counsel and that each party acknowledged that he or she was fully advised of the other party's financial means and resources and examined the other's exhibit with the benefit of separate counsel. It also contains a severability clause and an arbitration clause, and it provides that Missouri law controls its construction and effect.

¶ 9 Again, the parties were married one day after they executed the agreement. During the marriage, they had two children: Grace (born in December 2002) and Elliott (born in September 2004).

¶ 10 On April 28, 2010, petitioner petitioned for dissolution of the parties' marriage. She sought joint custody of the children and child support. She attached a copy of the premarital agreement and stated that both parties should be barred from receiving maintenance. On July 9, 2010, petitioner petitioned for temporary child support. On August 30, 2010, she served respondent with her verified comprehensive financial statement, listing her 2010 net income as $6,646 per month and her household expenses as $12,122 per month (resulting in a $5,476 monthly shortfall). Petitioner also listed total assets of about $4.12 million with no liabilities. She listed as part of her nonmarital assets McKelvey Rental, which she noted she acquired in 1992, with a current value of $622,479. (Again, McKelvey Homes was listed in her exhibit to the premarital agreement.)

¶ 11 On September 30, 2010, respondent filed his financial statement, listing his 2010 net income as $30 per month and his living expenses as $3,880 per month (resulting in a $3,850 monthly shortfall). He also listed total assets of about $295,000 and total liabilities of about $400,000. At a hearing on September 30, 2010, the trial court ordered respondent to pay petitioner $1,000 per month as contribution to household expenses.

¶ 12 On October 26, 2010, respondent moved for interim attorney fees, noting, in part, that he estimated fees of $25,000 to $75,000, due to a “complex premarital agreement.” In response, as an affirmative defense, petitioner raised the agreement's attorney-fee-shifting provision. On November 15, 2010, the trial court denied respondent's motion for interim fees and appointed a guardian ad litem (GAL).

¶ 13 On March 3, 2011, respondent moved for a declaratory judgment (735 ILCS 5/2–701 (West 2010)), seeking a general determination of the parties' rights under the premarital agreement and arguing that there was an actual controversy as to the validity and enforceability of the agreement, in whole or in part. In her response to respondent's motion, petitioner argued that Missouri law controlled, the agreement was valid because it contained a disclosure of the parties' assets and liabilities, the outline of the parties' rights and obligations in the agreement was fair, and it contained a clear and unambiguous maintenance waiver that both parties understood when they executed the agreement. She also argued that the parties voluntarily entered into the agreement, it was not unconscionable, and both parties were provided with a fair and reasonable disclosure. Petitioner also raised the agreement's arbitration provision, requesting that the trial court order the parties to arbitrate their dispute. However, because the agreement did not contain any provisions relating to custody, visitation, or support of the minor children, she asked the court to specify that those issues not be submitted to binding arbitration (as it would further be against public policy to do so (see In re Marriage of Best ( Best II ), 387 Ill.App.3d 948, 951, 327 Ill.Dec. 234, 901 N.E.2d 967 (2009))). Also on that date, res...