In re Reicher
| Docket Number | 2-20-0454 |
| Decision Date | 18 June 2021 |
| Citation | 2021 IL App (2d) 200454,196 N.E.3d 398,458 Ill.Dec. 94 |
| Parties | IN RE MARRIAGE OF Michael K. REICHER III, Petitioner and Counterrespondent-Appellee, and Laura A. Reicher, Respondent and Counterpetitioner-Appellant. |
| Court | United States Appellate Court of Illinois |
Robin M. Zandri, of Goostree Law Group, P.C., of St. Charles, for appellant.
Stephen D. Brown, of St. Charles, and Douglas B. Warlick, of Douglas B. Warlick & Associates, of Geneva, for appellee.
¶ 1 In February 2017, the circuit court entered a judgment dissolving the marriage of petitioner, Michael K. Reicher, and respondent, Laura A. Reicher. The judgment incorporated the parties’ marital settlement agreement (MSA). In December 2019, Laura petitioned the court to compel Michael's compliance with the MSA, and, in January 2020, issued subpoenas to Michael's employer and a financial institution, Fidelity Brokerage Services, LLC (Fidelity). Michael moved to quash the subpoenas and to dismiss Laura's petition. He also sought sanctions under Illinois Supreme Court Rule 137 (eff. Jan. 1, 2018). The court granted Michael's motions but did not resolve the claim for sanctions.
¶ 2 Laura appeals, arguing that the court erred by quashing her subpoenas and dismissing her petition. We dismiss in part and affirm in part.
¶ 4 Michael and Laura married in 2011. In October 2015, Michael petitioned to dissolve their marriage and, in February 2016, Laura counterpetitioned to do so.
¶ 5 In December 2016, after a prove-up hearing, the court entered a bifurcated judgment for dissolution of marriage (see 750 ILCS 5/401(b) (West 2014)), which dissolved the parties’ marriage but reserved for trial the issues of property and debt allocation, maintenance, and attorney fees. At a hearing to prove up the bifurcated judgment, Michael testified that he understood any bonuses, commissions, or equity awards that he would receive between the end of 2016 and the end of 2017 could be considered to be marital property for purposes of property allocation. Accordingly, the judgment stated as follows:
(Emphasis added.)
¶ 6 While awaiting trial, the parties settled all the financial issues between them. On February 9, 2017, the court entered a final judgment for dissolution of marriage, which incorporated the MSA. At a hearing to prove up the final judgment and the MSA, Michael testified that "every financial aspect of this case" was set forth in the MSA, he had made a full and complete disclosure of his assets and income prior to signing the MSA, and the MSA contained "forward-looking provisions *** about stock options going on in the future and a bonus in the future," which would be taken care of "if and when they occur." Further, he testified he understood some discovery may be required to determine to what Laura was entitled. Laura testified she had made a full and complete disclosure of her income, assets, and debts and understood that, if there were some undiscovered assets, those would be divided pursuant to the agreement. She also testified she understood the MSA contained provisions for future stock options and bonuses, which were left unresolved, because the parties were not yet able to determine what those were.
¶ 7 Paragraph 3.3 of the MSA stated that the parties had previously separated their joint financial accounts and were entitled to retain the entirety of those personal accounts, except as provided in paragraph 3.4. In addition, it stated that Michael "represents that there are no other undisclosed accounts; moreover, if an undisclosed account is discovered hereafter then it shall be divided as provided hereunder." Paragraph 3.4 of the MSA provided that the parties’ cash and stock in three identified accounts—Fidelity account ending in 5203, Fidelity account ending in 5256, and Merrill Edge account ending in 2111—be split, with Laura receiving a 70% share and Michael a 30% share.
¶ 8 Paragraph 3.6 of the MSA stated that Laura was entitled to a one-time payment of 30% of Michael's net bonus from his 2016 employment, which was payable in 2017. It further provided that, within five days of receiving the bonus, Michael was required to calculate and make the payment and provide supporting documents to Laura. Laura had 30 days to object to his calculation. If the parties could not agree to the correct amount to be paid after her objection, she was permitted to seek relief from the court. It also stated that, if Laura did not file a motion objecting to Michael's payment or tender of related information within 60 days of her receipt of it, she was barred from seeking relief from the court.
¶ 9 Paragraph 3.7 of the MSA provided Laura was entitled to 40% of the net shares of Michael's equity awards that were granted in 2014 and 2015 and vested and payable in 2017 and 2018. It required Michael to transfer to Laura 40% of his net shares, after selling and retaining shares to cover his tax liability, no later than three days after he received the equity award. Paragraph 3.7, as well as the remainder of the MSA, stated nothing concerning equity awards earned by Michael in 2016.
¶ 10 In February 2018, Laura petitioned the court to hold Michael in indirect civil contempt, alleging Michael had failed to comply with paragraph 3.7 of the MSA by failing to transfer 40% of the net shares awarded to him in his 2014 equity awards, which became vested and payable in 2017. She also alleged that Michael failed to notify her "of all the equity awards which he was awarded in 2014 and that became vested in 2017" and that she discovered his failure only after receiving subpoenaed documents from his Merrill Edge account.
¶ 11 In November 2018, the court entered an agreed order resolving Laura's petition, requiring Michael to transfer to her 40% of the net shares awarded to him in his 2014 and 2015 equity awards. In addition, the order required him to provide to Laura's accountant documents, including his 2017 and 2018 income-tax returns, year-end pay stubs, and summary statements relating to the equity awards.
¶ 12 On December 26, 2019, Laura petitioned the court to compel Michael's compliance with the MSA. First, she asserted that she "[wa]s informed and believe[d]" that Michael opened one or more undisclosed Fidelity accounts in his name before the final judgment was entered and she was entitled to 70% of those accounts under paragraphs 3.3 and 3.4 of the MSA. She also alleged that Michael failed to comply with paragraph 3.6 of the MSA, because he had not provided her with documents that would allow her to verify Michael's calculation of her share of his 2016 employment bonus. Finally, she asserted that the bifurcated judgment provided "the effective date for all financial issues [was] December 15, 2016[,] with the exception of any bonus, stock[,] or similar equity award that was earned in 2016." She alleged that Michael had not disclosed whether he received or exercised any stock or similar equity awards in 2016 and that, under the terms of the MSA, she was entitled to 40% of the equity awards (vested or unvested) that Michael exercised or was granted in 2016. Laura sought, among other things, an order requiring Michael to provide to her (1) statements for all Fidelity accounts in his name from February 9, 2017, to January 1, 2018; (2) a copy of the pay stub he received after his receipt of his 2016 bonus (paid in 2017); (3) a complete copy of his 2017 tax returns; and (4) information concerning any stock or similar equity awards he received or exercised in 2016. She did not seek an order requiring Michael to pay her monies to which she was allegedly entitled under the MSA. On January 3, 2020, Laura issued subpoenas to Fidelity and Michael's employer.
¶ 13 In response, Michael moved to quash the subpoenas, to dismiss Laura's petition, and to receive sanctions. In his motion to quash, Michael asserted he had fully complied with all financial obligations required of him under the MSA, any issue with respect to his equity awards had been resolved by the November 2018 agreed order, and no outstanding issues remained. He further asserted that the Fidelity subpoena would not lead to relevant information to the extent it sought documents relating to accounts held before the judgment and he "should not be forced to re-litigate issues determined nearly three years ago at the time of the parties’ divorce and against [sic ] more than two years ago when the parties litigated issues pertaining to the equity awards."
¶ 14 Michael sought dismissal under sections 2-615 and 2-619(a)(4) of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-615, 2-619(a)(4) (West 2018)), as well as sanctions under Illinois Supreme Court Rule 137 (eff. Jan. 1, 2018). Under section 2-615, Michael argued that Laura's petition failed to state a cause of action, because he had made all payments required under the MSA and no provision of the MSA required him to disclose any further information once he had done so. Therefore, he argued, "there [was] no compliance to compel." He contended, "all issues pertaining to the equity awards were disposed of via [the November 2018 agreed order], that provided for the specific number of shares to be allocated to each party, as well as verification of [his] tax rate...
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