Marriage of Burch, In re

• Decision Date: 09 November 1990
• Docket Number: No. 1-88-1254,1-88-1254
• Citation: Marriage of Burch, In re, 563 N.E.2d 1049, 205 Ill.App.3d 1082, 150 Ill.Dec. 922 (Ill. App. 1990)
• Parties: , 150 Ill.Dec. 922 In re the MARRIAGE OF Ralph BURCH, Petitioner-Appellant, and Arlene Burch, Respondent-Appellee.
• Court: Appellate Court of Illinois

Page 1049

563 N.E.2d 1049

205 Ill.App.3d 1082, 150 Ill.Dec. 922

In re the MARRIAGE OF Ralph BURCH, Petitioner-Appellant and Arlene Burch, Respondent-Appellee.

No. 1-88-1254.

Appellate Court of Illinois First District, Fifth Division.

Nov. 9, 1990.

[205 Ill.App.3d 1084] Barbara J. Agnew, Northbrook, for petitioner-appellant.

Richard R. Della Croce, Blue Island, for respondent-appellee.

Presiding Justice COCCIA delivered the opinion of the court:

This is an appeal from the trial court's denial of petitioner's motion to set aside an orally agreed-to property settlement which was incorporated into the judgment of dissolution of marriage between the parties in this cause.

For the reasons expressed herein, we reverse the order of the trial court denying, without evidentiary hearing, the husband's petition to vacate the oral prove-up prior to entry of the judgment, and vacate that portion of the judgment of dissolution of marriage which pertains to the incorporated property settlement. We affirm the trial court's order decreeing the dissolution of the marriage between the parties. We remand for further proceedings consistent with this opinion.

On June 22, 1984, Ralph Burch (petitioner), filed for dissolution of his 29-year marriage to Arlene Burch (respondent). A prove-up on the petition was heard by the trial court on October 13, 1987, at which time the trial court found that grounds existed for the dissolution of the marriage. The trial court further found, at these proceedings, that an oral agreement had been reached regarding the distribution of the property of the parties, and maintenance, and that the agreement was fair and reasonable. This finding was predicated, at least in part, upon the petitioner's statement during the oral prove-up that he agreed to the settlement, that he was not coerced to do so, and that he understood all of its terms and provisions. The trial court accordingly held that it would accept the oral agreement and incorporate it into the judgment of dissolution of marriage. The petitioner was instructed to prepare and file the transcript of the prove-up proceedings, along with a postponed judgment order, at which time the court would sign the order and make it final. Both counsel were instructed to sign off on the agreement and to review the transcript to make certain that it reflected what was said at the hearing.

Shortly following the prove-up, petitioner's suspicions increased that sometime during the marriage, respondent had fraudulently concealed a marital asset by purchasing an interest in a certain piece of improved realty, other than the marital domicile, and ultimately disposing of her interest in the property during the proceedings in the trial court, all without knowledge of or notice to petitioner, or to the court. Petitioner was also dissatisfied with certain provisions of the oral property agreement. He states that he was advised, following the prove-up, by his then attorney, that the oral agreement covering the property settlement would have to be written up, thus enabling the petitioner to make changes before it was finally accepted by the court. Petitioner, in his own mind, was of the opinion that since the oral agreement was to be written up and the order approving it ultimately was to be signed by the judge, the changes could be made prior to finalization. Within one month of the prove-up, petitioner discharged his attorney and retained new counsel, attorney Ilene Wolf, who attempted to investigate petitioner's fears that respondent had concealed marital property from him and from the court.

On February 25, 1988, respondent filed an emergency motion requesting the court to enter judgment, incorporating the property settlement, instanter, and further requesting attorney fees for the time and costs expended by respondent's attorney in preparing the judgment order, preparing a transcript of the oral prove-up, and preparing and presenting the emergency motion. Petitioner responded to the emergency motion, and subsequently filed his own motion and petition seeking to vacate the oral prove-up on grounds that the property agreement was unconscionable, and requesting that a date be set for trial. In his petition to vacate, Mr. Burch listed several reasons why he believed that the property settlement was unconscionable. These related primarily to the distribution of the marital assets, including pension funds, and did not include any allegation of, or reference to, the fraudulent transfer of an undisclosed marital asset. Both motions were set for hearing before the trial court on March 23, 1988.

On March 23, 1988, during argument on these motions, petitioner's counsel, in support of his motion to vacate, advised the court that she had newly-discovered information, apparently uncovered sometime after the filing of the petition to vacate the oral prove-up, to the effect that the respondent had used $23,000 of marital funds, during the marriage, to purchase an ownership in real estate, other than the marital residence. Attorney Wolf further advised the court that the new information would establish that, on the date following respondent's initial appearance in these proceedings, respondent at the direction or through the assistance of her divorce attorney, deeded away through a deed in trust, and a trust agreement, her interest in this alleged marital property to her son and daughter-in-law without disclosing this fact to the petitioner or the court.

It is petitioner's position that, given the initial discovery evidence obtained from respondent which reveals that she failed to disclose this transaction, coupled with her statement during cross-examination at the time of the prove-up that she had made full disclosure of her assets, which did not reflect this transaction, the property settlement agreement entered into at the time of the prove-up must be vacated and set aside as unconscionable. In support of her argument, attorney Wolf provided the trial judge with copies of the deed in trust and the trust agreement, and asked the court to allow further discovery on the issues raised by the newly-discovered information relating to fraud and unconscionability. The trial court in denying petitioner's motion did so without conducting an evidentiary hearing on petitioner's newly-discovered information. The trial court did nonetheless allow argument from respondent's counsel, without having taken any evidence in support thereof, to the effect that the funds initially used to purchase this property were non-marital in nature. Stating that she had again reviewed the property agreement, and had found that it was not unconscionable, and that the parties had had three years prior to the oral prove-up in which to conduct discovery, the trial judge granted respondent's motion for entry of judgment, incorporating the property settlement, and granted the requested attorney fees. Petitioner brought this appeal.

OPINION

At the outset, we call attention to the pertinent provisions of the Illinois Marriage and Dissolution of Marriage Act (the Dissolution Act), relating to property, support and attorney fees (Ill.Rev.Stat.1987, ch. 40, pars. 502, 503), together with corresponding portions of the Smith-Hurd Historical and Practice Notes (1980). The statute provides in relevant part:

"Section 502. Agreement.

(a) To promote amicable settlement of disputes between parties to a marriage attendant upon the dissolution of their marriage, the parties may enter into a written or oral agreement containing provisions for disposition of any property owned by either of them, maintenance of either of them, and support * * * of their children.

(b) The terms of the agreement * * * are binding upon the court unless it finds, after considering the economic circumstances of the parties and any other relevant evidence produced by the parties, on their own motion or on request of the court, that the agreement is unconscionable.

Section 503. Disposition of Property.

(b) For purposes of distribution of property pursuant to this Section, all property acquired by either spouse after the marriage and before a judgment of dissolution of marriage * * *, is presumed to be marital property * * *. The presumption of marital property is overcome by a showing that the property was acquired by a method listed in subsection (a) of this Section." (Ill.Rev.Stat.1987, ch. 40, pars. 502(a), (b), 503(b).)

The Smith-Hurd Historical and Practice Notes (1980), in dealing with section 502(b), state as follows:

"Subsection (b) * * * provides that the terms of the separation agreement, except as they pertain to children, are binding on the court unless the agreement is found to be unconscionable. * * *

Under prior Illinois law there was a different standard for court approval. Settlement agreements were approved by the court if found to be fair and reasonable. * * *

* * * * * *

This section does not eliminate many of the traditional grounds for setting aside settlement agreements, including grounds of fraud, coercion, and violation of any rule of law, public policy or morals. * * *

* * * * * *

The standard of unconscionability introduced by this section * * * is new to the area of Illinois matrimonial law * * *. [Citations.] The standard as it relates to separation agreements includes 'protection against overreaching, concealment of assets, and sharp dealing not consistent with the obligation of marital partners to deal fairly with each other.' Uniform Marriage and Divorce Act (9A U.L.A.) section 306 Commissioners' Note at 137. The Commissioners' Note further provides:

In order to determine whether the agreement is unconscionable, the court may look to the economic circumstances of the parties resulting from the agreement, and any other relevant evidence such as the conditions under which the agreement was made, including the knowledge of the other party. If the court finds the agreement not unconscionable, its...