In re Marriage of Morreale

• Decision Date: 16 July 2004
• Docket Number: No. 2-03-0470.,2-03-0470.
• Citation: 813 N.E.2d 313,351 Ill. App.3d 238,286 Ill.Dec. 256
• Parties: In re MARRIAGE OF Carmen James MORREALE, Petitioner-Appellant, and Mary Ellen Morreale, n/k/a Mary Ellen Schumann, Respondent-Appellee.
• Court: United States Appellate Court of Illinois

813 N.E.2d 313

351 Ill. App.3d 238

286 Ill.Dec. 256

In re MARRIAGE OF Carmen James MORREALE, Petitioner-Appellant, and

Mary Ellen Morreale, n/k/a Mary Ellen Schumann, Respondent-Appellee.

No. 2-03-0470.

Appellate Court of Illinois, Second District.

July 16, 2004.

Howard W. Broecker, Timothy B. Newitt and Markus May, Johnson, Westra, Broecker, Whittaker & Newitt, Carol Stream, IL, Attorneys for Appellant.

Roger C. Nelson, Jr., Nelson Law Offices, Wheaton, IL, Attorney for the Appellee.

Justice BOWMAN delivered the opinion of the court:

The marriage of petitioner, Carmen James Morreale, and respondent, Mary Ellen Morreale, n/k/a Mary Ellen Schumann, was dissolved on April 6, 1995. The dissolution judgment incorporated the parties' marital settlement agreement. On September 4, 2002, Carmen petitioned for postjudgment relief. He alleged that, contrary to the agreement, Mary Ellen had failed to report maintenance payments as income on her 2000 tax return, resulting in a $10,000 assessment against him for taxes and penalties. Mary Ellen moved to dismiss the case, and the trial court granted the motion. On appeal, Carmen argues that the trial court failed to address all of the issues raised in his petition and erred by granting the motion. We affirm.

The marital settlement agreement states in relevant part:

"6. LUMP SUM SETTLEMENT IN LIEU OF PROPERTY

CARMEN agrees to pay to MARY ELLEN and MARY ELLEN agrees to accept as and for a lump sum settlement in lieu of property the sum of $140,011.00 payable in 72 equal installments of $1[,]945.00 commencing with the first day of the month following the sale and closing of the marital residence. * * * The payments hereunder shall be terminable only in the event of the death of MARY ELLEN. In such event, any balance due and owing will be paid into a trust to be established by MARY ELLEN for the benefit of the parties' children. All payments contemplated under this paragraph shall be deductible by CARMEN and taxable to MARY ELLEN on their respective income tax returns pursuant to the applicable provisions of the Internal Revenue Code. * * *

7. WAIVER OF MAINTENANCE

Except as otherwise provided for in Paragraph 6 hereinabove, both parties hereby waive all rights to support and maintenance from each other, past, present, and future. Any Judgment for Dissolution of Marriage entered herein shall contain a provision barring each of the parties hereto from claiming any rights to support or maintenance.

8. DISTRIBUTION OF MARITAL PROPERTY

* * *

* * * The parties agree that CARMEN shall retain all of his interest in Benefit Systems & Services Inc. with a stipulated value of $343,000 free and clear of any interest on the part of MARY ELLEN, except as otherwise provided for in Paragraph 6 hereof."

At the prove up for the dissolution proceeding, the trial court asked Mary Ellen if she understood that "maintenance [would] be as provided in the marital settlement agreement." Mary Ellen answered in the affirmative. Mary Ellen's attorney stated that the "maintenance provision" was in paragraph six of the agreement and provided for $1,945 per month for 72 months.

In his postjudgment motion, Carmen alleged the following. The payments outlined in paragraph six of the settlement agreement were for the support and maintenance of Mary Ellen and the parties' minor children. Contrary to the agreement, Mary Ellen failed to report the payments as income on her 2000 income tax return. Therefore, the Internal Revenue Service (IRS) assessed taxes and penalties of $10,000 against Carmen. Because the agreements and subsequent orders "inadvertently" failed to state that the payments would terminate upon Mary Ellen's death, the IRS made a preliminary finding that the payments were not deductible by Carmen or taxable to Mary Ellen. Carmen requested that the trial court provide relief by: (1) amending the dissolution judgment nunc pro tunc to state that the payments will terminate upon Mary Ellen's death; (2) ordering Mary Ellen to "reimburse" Carmen for the taxes she avoided by not including the payments in her state and federal income tax returns; or (3) issuing a rule requiring Mary Ellen to show cause why she should not be held in contempt of court for failing to comply with the dissolution judgment. Carmen additionally sought attorney fees.

Mary Ellen moved to dismiss the case under section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2002)). She argued that Carmen was seeking to modify the judgment under section 2-1401 of the Code (735 ILCS 5/2-1401 (West 2002)) but was barred by the statute's two-year limitations period. The trial court granted the motion, and Carmen timely appealed. We review de novo an appeal from a section 2-619 dismissal. We must determine whether a genuine issue of material fact should have precluded the dismissal or, absent such an issue of fact, whether the dismissal is proper as a matter of law. Raintree Homes, Inc. v. Village of Long Grove, 209 Ill.2d 248, 254, 282 Ill.Dec. 815, 807 N.E.2d 439 (2004). However, we may affirm the trial court's decision on any basis supported by the record, regardless of the reasoning employed by the trial court. Scassifero v. Glaser, 333 Ill.App.3d 846, 860, 267 Ill.Dec. 487, 776 N.E.2d 859 (2002).

We first address whether the trial court erred in dismissing Carmen's first claim, that the dissolution judgment should be amended nunc pro tunc to provide that the payments will terminate upon Mary Ellen's death. Nunc pro tunc orders correct clerical errors in written orders to conform them to the court's actual judgment; nunc pro tunc orders cannot be used to alter the court's judgment. In re Marriage of Breslow, 306 Ill.App.3d 41, 50, 239 Ill.Dec. 111, 713 N.E.2d 642 (1999). Contrary to Carmen's allegation that the settlement agreement "inadvertently" fails to state that the payments will end upon Mary Ellen's death, the agreement specifically provides that, upon her death, any remaining payments will be deposited into a trust fund to benefit the parties' children. We therefore agree with Mary Ellen that Carmen sought to amend the judgment under section 2-1401.

Section 2-1401 allows a party to challenge a final judgment more than 30 days after its entry by bringing to the court's attention issues of fact outside the record which, if known when the judgment was entered, would have affected the judgment. Clay v. Huntley, 338 Ill.App.3d 68, 74, 272 Ill.Dec. 502, 787 N.E.2d 317 (2003). A section 2-1401 petition may not be brought more than two years after the judgment's entry. In computing this two-year period, time during which the petitioner was under legal disability or duress, or the ground for relief was fraudulently concealed, is not included. 735 ILCS 5/2-1401(c) (West 2002); see People v. Pinkonsly, 207 Ill.2d 555, 562, 280 Ill.Dec. 311, 802 N.E.2d 236 (2003). Here, the judgment was entered on April 6, 1995, and Carmen did not bring the action until September 4, 2002. Carmen maintains that the limitations period should be tolled because Mary Ellen fraudulently concealed the fact that she had not reported the payments as income on her 2000 income tax return. However, this alleged fraudulent concealment occurred long after the two-year limitations period had already expired. Accordingly, we hold that the trial court did not err in dismissing Carmen's first claim as untimely.

Carmen argues that, even if the trial court correctly dismissed his first claim, his remaining claims do not involve section 2-1401, because they sought to enforce the judgment rather than modify it. Carmen's second claim sought a "reimbursement" for the money Mary Ellen saved by not paying taxes on the payments in 2000. Carmen maintains that he is entitled to this money because Mary Ellen breached the settlement agreement, which, according to Carmen, clearly provides that the payments are maintenance and that Mary Ellen is required to pay taxes on them. He alternatively contends that the agreement is ambiguous as to whether the payments are maintenance or a property settlement, and that the case should be remanded so that the trial court can consider extrinsic evidence. Mary Ellen argues that the agreement clearly shows that the payments are a property settlement and, therefore, are not income for tax purposes.

The interpretation of a marital settlement agreement is a matter of contract construction, and the court should ascertain and give effect to the parties' intent. The best indication of that intent is the contract's language. When a settlement agreement's language is ambiguous, the trial court should consider parol evidence to determine the parties' intent. In re Marriage of Carrier, 332 Ill.App.3d 654, 658, 265 Ill.Dec. 893, 773 N.E.2d 657 (2002). In this case, the agreement is ambiguous as to whether the payments are a property settlement or maintenance. The following provisions support a property settlement interpretation. The payments are listed in paragraph six under the heading, "LUMP SUM SETTLEMENT IN LIEU OF PROPERTY," and the paragraph states that Mary Ellen was accepting the payments as such. Paragraph eight states that Carmen was to retain his $343,000 interest in a company, "free and clear of any interest on the part of MARY ELLEN, except as otherwise provided for in Paragraph 6 hereof."

On the other hand, the...