In re Onishi-Chong
Citation | 153 N.E.3d 1071,2020 IL App (2d) 180824,440 Ill.Dec. 495 |
Decision Date | 20 February 2020 |
Docket Number | Nos. 2-18-0824 & 2-18-1015,s. 2-18-0824 & 2-18-1015 |
Parties | IN RE MARRIAGE OF Karen I. ONISHI-CHONG, Petitioner-Appellant, AND Michael T. CHONG, Respondent-Appellee. |
Court | United States Appellate Court of Illinois |
Robert H. Lang and Audrey Mense, of Thompson Coburn LLP, of Chicago, and Todd D. Scalzo, of Mirabella, Kincaid, Frederick & Mirabella, LLC, of Wheaton, for appellant.
Steven N. Peskind, of Peskind Law Firm, of St. Charles, for appellee.
¶ 1 Petitioner, Karen I. Onishi-Chong, filed a petition pursuant to section 2-1401 of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-1401 (West 2018) ) to set aside a marital settlement agreement (MSA) based on the alleged fraudulent concealment of a purported scheme to reduce the salary of respondent, Michael T. Chong, while their divorce was pending. During their marriage, respondent, who was a 50% owner of Voyage Financial Group, LLC (Voyage), equally split the profits with his partner, Thomas Royce. Petitioner alleged that after the dissolution judgment she discovered that respondent had misrepresented his actual income during the divorce proceedings and colluded with his partner to conceal his income to reduce maintenance and support. She sought to vacate the decree or alternatively to reset maintenance retroactively to the date of the dissolution judgment.
¶ 2 Respondent filed a motion for summary judgment to dismiss the section 2-1401 petition pursuant to section 2-1005 of the Code (id. § 2-1005), arguing that petitioner failed to exert due diligence and that the claim was barred under the doctrine of res judicata . The trial court granted respondent's motion for summary judgment, determining that, if petitioner had been lied to during the pretrial, the prove-up, or some time earlier, this was discoverable by petitioner if she chose to pursue it, but she did not. Petitioner appeals raising several arguments. We affirm.
¶ 5 Petitioner filed for divorce in August 2012. The parties litigated their divorce for a period of approximately 22 months. Throughout the proceedings the parties engaged in full discovery. Petitioner served respondent with interrogatories and document requests for records related to his income, assets, and debts. Among those documents were records from Voyage, a financial planning firm. Petitioner needed these records to establish respondent's income for the purpose of maintenance and child support.1 Respondent represented that he was earning $240,000 to $365,000 per year from 2012 through 2014.
¶ 6 On April 14, 2014, petitioner tendered to the trial court a pretrial memorandum, which we observe petitioner omitted from her statement of facts. Petitioner alleged in the memorandum that respondent "intentionally reduced his 2012 and 2013 income due to the pending divorce" and that she believed his annual income had been $518,235. Her conclusion was based on the following reasoning:
¶ 7 Petitioner also sought half the value of respondent's ownership interest in Voyage. She noted that a joint valuation of Voyage had been conducted by Lee Gould of Lee Gould & Associates. He was a joint valuation expert, retained by both parties to value Voyage, who had provided the parties' attorneys a brief summary of his valuation calculations.
¶ 8 After engaging in full discovery, including the use of Gould, the parties settled the dissolution proceedings by agreement. Petitioner states in her appellate brief that relying on respondent's and Royce's representations, she "voluntarily entered into the marital settlement agreement [MSA] in April of 2014." In part, the parties' MSA requires respondent is to pay petitioner unallocated family support of $12,500 per month for a period of 54 months, or $150,000 per year.
¶ 9 At the prove-up hearing on April 16, 2014, the following colloquy took place between respondent's attorney, Mark Farrow, and both parties:
¶ 10 The terms of settlement were set forth at the prove-up on April 16, 2014. The trial court approved the MSA, which was later incorporated into the judgment of dissolution, entered on May 13, 2014. In subsequently denying petitioner's section 2-1401 petition the court commented that the April 16, 2014, hearing addressed respondent's income and that the MSA was silent as to that issue.
¶ 11 The MSA provides, in relevant part, as follows:
¶ 13 On May 10, 2016, petitioner filed a motion pursuant to section 2-1401, alleging that respondent secreted his actual income and conspired with Royce to shelter his income from the divorce. As stated, petitioner sought to vacate the divorce decree or alternatively to reset maintenance retroactively to the date of the divorce.2
¶ 14 Petitioner alleged that she was operating under the erroneous belief that respondent's gross income from his employment was approximately $240,000 per year. She claimed upon information and belief that, during the divorce proceedings, respondent was actually earning more income than he represented and that he was therefore "grossly" underpaying maintenance. Petitioner alleged that, immediately after the judgment, respondent began living well beyond the means of someone with an annual gross compensation of $240,000 but also paying $150,000 of annual maintenance. She alleged that respondent rented and furnished a 5400-square-foot home, began taking expensive trips, bought a number of expensive gifts for the children, was planning the marriage to a second wife with all the related expenses, and bought two new SUVs and a Ferrari. Petitioner alleged that she justifiably relied on respondent's misrepresentations, given the parties' discovery and respondent's status as a financial planner. Petitioner further alleged that on April 25, 2016, she demanded information from respondent related to his compensation, and, thereafter, he failed and refused to produce any information to her, which supported only an inference that respondent and Royce engaged in misconduct.
¶ 15 Petitioner claimed that respondent and Royce "trued up" (the True-Up Scheme) respondent's underreported compensation that he earned during the proceedings. Prior to 2012, Royce and respondent had split their Voyage earnings but, beginning in 2012 when petitioner filed for divorce, they diverted payment from respondent to Royce under the guise of an "origination-based" compensation system. She alleged that Royce and respondent used this system until the MSA was executed, at which point the structure flipped, and respondent began earning significantly more than Royce. Petitioner alleged that this flipped structure, which was contrary to respondent's pre-MSA representations to petitioner, Gould, and others, stayed in place until 2016, when petitioner filed her section 2-1401 petition, at which point respondent and Royce reverted to...
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