In re Wig

• Decision Date: 29 December 2020
• Docket Number: No. 2-19-0929,2-19-0929
• Citation: 2020 IL App (2d) 190929,180 N.E.3d 231,449 Ill.Dec. 817
• Parties: IN RE MARRIAGE OF David WIG, Petitioner-Appellee, and Judith Wig, n/k/a Judith Progo, Respondent-Appellant.
• Court: United States Appellate Court of Illinois

2020 IL App (2d) 190929

180 N.E.3d 231

449 Ill.Dec. 817

IN RE MARRIAGE OF David WIG, Petitioner-Appellee, and Judith Wig, n/k/a Judith Progo, Respondent-Appellant.

No. 2-19-0929

Appellate Court of Illinois, Second District.

Opinion filed December 29, 2020

Chantelle Porter, of A. Traub & Associates, Ltd., of Lombard, for appellant.

Richard Ian Conner, of Kollias P.C., of Winfield, for appellee.

JUSTICE SCHOSTOK delivered the judgment of the court, with opinion.

¶ 1 The marriage of petitioner, David Wig, and respondent, Judith Wig, n/k/a Judith Progo, was dissolved in August 2018. Incorporated into the dissolution judgment was the parties' marital settlement agreement. The agreement provided a calculation to determine the amount of maintenance that respondent would pay petitioner. The agreement also provided that, if a change in the law affected the tax consequences of the maintenance ordered in the agreement, the parties could negotiate a change in the agreement. If those efforts failed, the parties would submit the matter to the trial court for resolution. A few days after the parties' marriage was dissolved, respondent lost her job. In September 2018, under the terms of the dissolution judgment, petitioner submitted a qualified domestic relations order (QDRO) to his former employer. Garnishment of petitioner's pension began in October 2018. Respondent obtained new employment in November 2018, and in December 2018, petitioner moved to set maintenance. Effective January 1, 2019, section 504(b-1)(1)(A) of the Illinois Marriage and Dissolution of Marriage Act (Act) ( 750 ILCS 5/504(b-1)(1)(A) (West 2018)) (the 2019 version) was amended as to its formula for the initial setting of maintenance.¹ The former version of section 504(b-1)(1)(A) was added by Public Act 100-520, § 15 (eff. Jan. 1, 2018) and is found in the 2017 supplement to West's Illinois Compiled Statutes (the former version) (see 750 ILCS 5/504(b-1)(1)(A) (West Supp. 2017) ).

¶ 2 In February 2019, the QDRO concerning petitioner's pension was entered in the trial court. Thereafter, the parties disagreed over which version of section 504(b-1) the trial court should apply in setting the specific dollar amount of maintenance. The court chose the 2019 version but applied the provision on modification of maintenance, rather than the provision governing the initial setting of maintenance. Compare 750 ILCS 5/504(b-1)(1)(A-1) (West 2018) with id. § 504(b-1)(1)(A).

¶ 3 Respondent timely appeals from that order.² For the reasons that follow, we affirm.

¶ 4 I. BACKGROUND

¶ 5 After almost 29 years of marriage, the parties' marriage was dissolved. The agreement incorporated into the August 22, 2018, dissolution judgment stated the parties' annual incomes, divided the parties' marital assets and debts, and provided petitioner with maintenance. Concerning the parties' incomes, the agreement indicated that respondent earned an annual salary of $54,000 and that petitioner, who was retired, received $19,260 in annual social security benefits and $18,123.96 in annual pension benefits. The parties' marital property and debts, which were not large, were divided essentially equally. The section of the agreement addressing maintenance provided:

"(a) Beginning immediately upon [respondent] receiving pension benefits from [petitioner's] pension (pursuant to QDRO), [respondent] shall pay maintenance to [petitioner] pursuant to statutory guidelines, subject to the 40% cap, based upon the following formula: Thirty percent (30%) of [respondent's] gross income, inclusive of benefits received from [petitioner's] pension minus twenty percent (20%) of [petitioner's] gross income, inclusive of Social Security benefits and pension benefits received by [petitioner] (exclusive of pension benefits paid to [respondent]). *** Upon entry of the QDRO dividing [petitioner's] pension, the attorneys for the parties shall immediately determine the parties' incomes and the dollar amount of maintenance and enter an order setting the dollar amount of maintenance.

(b) Payments for maintenance shall be modifiable upon a showing of a substantial change in circumstances.

* * *

*** It is agreed and understood by the parties that all of the payments made by [respondent] to [petitioner] pursuant to this [s]ection *** of this [a]greement shall constitute maintenance payments which are imposed on or incurred by [respondent] under a written instrument within the meaning of Section 71 of the Internal Revenue Code, as amended, and as of now in effect, and of similar provisions of future laws, and that such payments will be includable in [petitioner's] gross income and deductible by [respondent] for federal, state, and local (if any) tax purposes. Inasmuch as this [a]greement has been negotiated and executed on the assumption that the payments made by [respondent] to [petitioner] pursuant to this [s]ection *** of this [a]greement will be deductible by [respondent] and taxable to [petitioner], if any or all of such payments are not so includable and deductible as a result of a final and binding judicial or administrative determination, or because of amendment or repeal of the applicable statutory provisions or their authoritative interpretation, then any such payment(s) otherwise due [petitioner] pursuant to this [s]ection *** of this [a]greement may be adjusted by an amount to be negotiated by the parties. In the event that the parties are unable to agree upon a readjustment of these provisions to take account of the changed tax impact, then this matter shall be submitted to the [trial court] for final and binding determination of the payments from [respondent] to [petitioner]."

¶ 6 The 30%-20% calculation in the agreement mirrored the formula in the former version of section 504(b-1)(1)(A) of the Act for the initial setting of maintenance. See 750 ILCS 5/504(b-1)(1)(A) (West Supp. 2017).

¶ 7 Ten days after the parties' marriage was dissolved, respondent was fired from her job. At the end of September 2018, petitioner delivered the required QDRO to his former employer. In the beginning of October 2018, petitioner's former employer began garnishing petitioner's pension. At the end of November 2018, respondent obtained new employment, with an annual income of $53,000. On December 11, 2018, after learning that respondent had obtained new employment, petitioner petitioned to set the dollar amount of maintenance.

¶ 8 Effective January 1, 2019, before the trial court's hearing on the petition to set maintenance, section 504 was amended in two respects pertinent here. First, an amendment to section 504(b-1)(1)(A) ( 750 ILCS 5/504(b-1)(1)(A) (West 2018)) altered the formula for the initial setting of maintenance. This amendment was in response to a change in federal law that eliminated the deductibility of maintenance for federal tax purposes. See Pub. L. No. 115-97, 131 Stat. 2089 (2017) (repealing 26 U.S.C. § 71 ).

¶ 9 Second, section 504(b-1)(1)(A-1) ( 750 ILCS 5/504(b-1)(1)(A-1) (West 2018)) was added. This section provided that the 30%-20% formula in the former version for the initial setting of maintenance (which, again, was mirrored in the parties' agreement) would generally apply to "[m]odification of maintenance orders entered before January 1, 2019, that are and continue to be eligible for inclusion in the gross income of the payee for federal income tax purposes and deductible by the payor." Id.

¶ 10 On January 9, 2019, after the 2019 version of section 504 of the Act went into effect, respondent answered the petition to set the dollar amount of maintenance. Respondent asserted that she had not received any of petitioner's pension benefits to which she was entitled. The trial court continued the proceedings for the entry of the QDRO. On February 5, 2019, the QDRO was entered in court. On April 1, 2019, respondent began receiving her share of petitioner's pension pursuant to the QDRO.

¶ 11 At the hearing on the petition, the parties disagreed over whether the former or 2019 version of section 504(b-1) applied to the calculation of maintenance. The parties did agree that, under the former version, petitioner would receive $423 in monthly maintenance, but under the 2019 version, he would receive only $3 in monthly maintenance. Petitioner asked the court to apply the agreement's maintenance formula, which, in effect, would be to apply the former version of section 504 because the agreement's formula was borrowed from that version. See 750 ILCS 5/504(b-1)(1)(A) (West Supp. 2017). Petitioner also noted that applying the 2019 version of the Act would leave him with an absurdly small amount of maintenance. Respondent urged the court to apply the 2019 version of section 504.

¶ 12 The trial court held that our decision in In re Marriage of Carstens , 2018 IL App (2d) 170183, 421 Ill.Dec. 744, 101 N.E.3d 181, required the court to apply the 2019 version of section 504. The court then considered whether to follow section 504(b-1)(1)(A), which governed the initial setting of maintenance, or section 504(b-1)(1)(A-1), which governed the modification of maintenance. The court decided to apply section 504(b-1)(1)(A-1), reasoning that this was "the better move" because "that's what [the parties] intended and [the court has] to give credence *** to the *** agreement." The court continued:

"[I]f the IRS says no, you're back, *** then it would seem to me the only alternative left for this Court is to apply [ section 504(b-1)(1)(A) ] of the maintenance statute, which provides for a formula without deductibility and deals with that income, but that's for another day and maybe a day we don't have to worry about if the IRS goes along with this provision."

¶ 13 In October 2019, the trial court, in line with its decision, awarded petitioner $423 in monthly maintenance. The court also ordered that respondent pay petitioner $705.87. This sum represented the difference between $5076 in retroactive maintenance owed to petitioner from October 1, 2018, to ...