In re Tilmon
| Decision Date | 11 March 1981 |
| Docket Number | Adv. No. 80 A 0613.,Bankruptcy No. 80 B 00722 |
| Citation | 9 BR 979 |
| Parties | In re James A. TILMON, Sr., also d/b/a Tilmon Distributing Co., Debtor. James A. TILMON, Sr., Plaintiff, v. Louise Irene TILMON, Defendant. |
| Court | U.S. Bankruptcy Court — Northern District of Illinois |
James L. Nachman of Nachman, Munitz & Sweig, Ltd., Chicago, Ill., for plaintiff.
Donald Geiger, Waukegan, Ill., for defendant.
This matter coming on to be heard upon the Amended Complaint of JAMES A. TILMON, SR. for Injunction and Other Relief, seeking, inter alia, a determination of the dischargeability of debt claimed to be nondischargeable pursuant to Clause 5 of Section 523(a) of the Bankruptcy Code, and upon the Amendment to Answer thereto filed by LOUISE IRENE TILMON, Creditor of the above-named Debtor, and the parties appearing by their respective attorneys, and
The Court having examined the pleadings filed in this matter, and having received and examined the evidence adduced, and having received and examined the Memorandum filed by Defendant in support of her position, and having heard arguments of counsel and the Court being fully advised in the premises;
The Court Finds:
1. On December 14, 1958, Plaintiff, JAMES A. TILMON, SR., and Defendant, LOUISE IRENE TILMON, were married to each other. Three children were born to them as a result of said marriage, namely: James Tilmon, Jr., Thera Irene Tilmon, and John Michael Tilmon, ages fifteen, fourteen, and twelve, respectively, at the time of the entry of the Decree of Divorce hereinafter described.
2. On or about February 1, 1970, Plaintiff established Tilmon Productions, a sole proprietorship. Tilmon Productions was an audio-visual production company, reproducing a variety of motion pictures, slide films, and filmstrips. A loan of $15,000.00 was obtained from the First National Bank of Highland Park to finance the business. Plaintiff testified that the bank required dual signatures on the loan documents.
The business was incorporated as Tilmon Productions, Inc. sometime in 1971 or 1972, with the new corporation assuming the assets and liabilities of the sole proprietorship. Plaintiff, JAMES A. TILMON, SR., was named president of Tilmon Productions, Inc. At the time of incorporation, there were two common and two preferred shareholders. Plaintiff owned 12½% of the common stock, and his father, George W. Tilmon, owned the balance. The two preferred shareholders were Amoco Venture Capital Company and Miles Burford. At the time of the entry of the Decree of Divorce, the stock ownership had not changed.
Subsequently, Tilmon Enterprises was formed as a subsidiary of Tilmon Productions, Inc. Plaintiff had no recollection of the date on which Tilmon Enterprises was formed. As an employee of Tilmon Enterprises, Plaintiff performed services as a consultant for Tilmon Productions, Inc. Tilmon Productions, Inc. compensated Tilmon Enterprises for these services, and Tilmon Enterprises in turn compensated Plaintiff.
3. Defendant, LOUISE IRENE TILMON, worked at Tilmon Productions during 1970 and 1971. During this period, Plaintiff was employed by American Airlines and was also involved in a television program for WTTW. In Plaintiff's absence, Defendant served in whatever capacity was necessary, including bookkeeper, secretary, administrative assistant, and production assistant. Although she did not work every day, there were days that she worked as many as eighteen hours. Defendant was not compensated for these services.
4. In 1972, JAMES A. TILMON, SR. filed a complaint for divorce in the Circuit Court of the Nineteenth Judicial Circuit, Lake County, Illinois, Case No. 72 D 755. LOUISE IRENE TILMON filed a counterclaim for separate maintenance. On January 16, 1973, a Decree for Separate Maintenance was entered, which provided in pertinent part as follows:
A copy of the Decree for Separate Maintenance was offered and received into evidence as Defendant's Exhibit No. 2.
5. From 1972 until June of 1975, Defendant, LOUISE IRENE TILMON, worked as a bookkeeper for Clausen, Inc. In July of 1975, she left Clausen and began working for Bell & Howell at a salary of approximately $8,000.00, which represented an increase of about $1,000.00 from the amount she was earning at the time of the entry of the Decree for Separate Maintenance.
6. Plaintiff's income tax return for 1975 indicates that his gross income for that year was $95,176.00. A copy of the return was offered and received into evidence as Defendant's Exhibit No. 1. On July 9, 1975, Plaintiff's gross earnings were at least $80,000.00. This amount represented a substantial increase from his earning capacity at the time of the entry of the Decree for Separate Maintenance. During the interim period, Plaintiff had been promoted by American Airlines to the position of captain and had also secured a contract with NBC. He was receiving approximately $40,000.00 under a contract negotiated with NBC in December of 1974. Sometime during the spring of 1975, this contract was renegotiated. A copy of a letter written by Ed Planer, Director of News at WMAQ-TV, dated May 9, 1975, was offered and received into evidence as Defendant's Exhibit No. 9. The letter is addressed to Mr. Saul Foos, an attorney then representing Plaintiff, and is signed as "Agreed and Accepted" by JAMES A. TILMON, SR. In the letter, Mr. Planer states that under the terms of the renegotiated contract, Plaintiff's salary would be $55,000.00 for the first year (retroactive to February 1, 1975), $62,000.00 for the second year, and $71,000.00 for the third year.
In addition to his income from American Airlines, which was at least $25,000.00 for the year 1975, Plaintiff also earned small amounts from speaking engagements as well as his salary from Tilmon Productions, Inc. A copy of a quarterly tax return for Tilmon Productions, Inc., including, inter alia, a Wage and Tax Statement, Form W-2, for Plaintiff, JAMES A. TILMON, SR., was offered and received into evidence as Defendant's Group Exhibit No. 10. The W-2 form indicates that Plaintiff's gross earnings from Tilmon Productions, Inc. for the year 1975 was $15,400.00.
7. Sometime during April of 1975, Defendant, LOUISE IRENE TILMON, filed a Petition of Modification of Support in Case No. 72 D 755. A copy of the petition was offered and received into evidence as Defendant's Exhibit No. 3. The petition alleged in pertinent part as follows:
Defendant, LOUISE IRENE TILMON, testified that although the idea of divorce had been considered, she had not yet decided to grant Plaintiff a divorce and appeared in court on July 9, 1975 for the hearing on her petition to increase support. Plaintiff had been seeking a divorce for quite some time but apparently did not have grounds. During the period that the Decree for Separate Maintenance was in effect, there was a great deal of financial bickering between the parties. Indeed, at the hearing on the adversary complaint, when Defendant's attorney inquired as to what financial information Plaintiff brought into court on July 9, 1975 relative to the alleged "buy-out" of Defendant's interest in Tilmon Productions, Inc. hereinafter discussed, Plaintiff responded, ...
To continue reading
Request your trial