Marriage of Waggoner, In re

• Decision Date: 25 May 1994
• Docket Number: No. 5-93-0127,5-93-0127
• Parties: , 199 Ill.Dec. 844 In re MARRIAGE OF Ann H. WAGGONER, Petitioner-Appellee, and Daryl L. Waggoner, Respondent-Appellant.
• Court: United States Appellate Court of Illinois

Page 1198

634 N.E.2d 1198

261 Ill.App.3d 787, 199 Ill.Dec. 844

In re MARRIAGE OF Ann H. WAGGONER, Petitioner-Appellee and Daryl L. Waggoner, Respondent-Appellant.

No. 5-93-0127.

Appellate Court of Illinois,

Fifth District.

May 25, 1994.

Douglas A. Enloe of Gosnell, Borden & Enloe, Ltd., Lawrenceville, for respondent-appellant.

Timothy R. Neubauer, Curtis W. Martin, Mitchell, Neubauer, Shaw & Hanson, P.C., Mt. Vernon, for petitioner-appellee.

Justice CHAPMAN delivered the opinion of the court:

Respondent, Daryl Waggoner (Husband), appeals the trial court's judgment of dissolution and the denial of Husband's petition to modify. The main issue is whether the trial court properly characterized Husband's pending workers' compensation claim as marital property. We affirm in part and reverse in part and remand with directions.

The parties were married on June 5, 1982. At the time of the marriage, Ann Waggoner (Wife) was employed at Suttle Apparatus. After Suttle Apparatus closed, Wife worked at various other jobs: cleaning houses, working in corn fields for Akin Seed Company, and tending bar for her brother. In May 1988, Wife began working at Syd's Tavern for $5.00 per hour, and she was employed there at the time of the dissolution proceedings.

Husband was employed by Bridgeport High School during the 1982-1983 school year. He was unemployed from 1983 through 1985. In 1985, Husband began working for the Illinois Department of Children and Family Services as a Child Welfare Specialist I. On January 28, 1988, Husband injured his back at work, and although he underwent two surgeries in an attempt to remedy his back injury, his treating physician testified that Husband is permanently and totally disabled as a result of his injury.

Husband filed a workers' compensation claim against the State of Illinois. At the time of the dissolution proceedings, he had been receiving an average of $1,216.68 per month in temporary total disability payments. Respondent was also receiving social security disability payments of $187.00 per month. Husband's permanent total disability workers' compensation claim was pending and undetermined at the time of trial.

In its judgment of dissolution, the trial court awarded Wife the parties' 1987 Mazda RX7 and 1978 Oldsmobile Cutlass, the parties' furniture, and all other personal property in her possession. Husband was awarded the 1984 Phoenix, his 1981 Chevy truck, his horse tack, and other personal property in his possession. Husband was also awarded his pension benefits and his non-marital social security disability income. Husband was ordered to pay Wife $200.00-per-month maintenance for 18 months and one-half of his final workers' compensation award or settlement.

The parties' sole marital debt, notes relating to the purchase of the 1986 Mazda RX7 and the 1978 Oldsmobile Cutlass, was assigned to Husband, and any difference between the balance owed on February 18, 1993, and $3,755.22 was ordered paid by Husband to Wife.

Husband argues that: (1) the trial court's property division was inequitable and an abuse of discretion; (2) the trial court's assignment of the marital debt to Husband was inequitable and an abuse of discretion; (3) the maintenance award granted to Wife was inequitable, against the manifest weight of the evidence, and an abuse of discretion; and (4) the trial court's denial of Husband's petition to modify was an abuse of discretion and against the manifest weight of the evidence.

Husband argues that the property division made by the trial court was inequitable and an abuse of the court's discretion because Husband's workers' compensation claim is not marital property. In the alternative, Husband argues that, even if workers' compensation benefits are marital property, no part of them should be awarded to Wife.

Section 503 of the Illinois Marriage and Dissolution of Marriage Act (the Act) creates a rebuttable presumption that all property acquired after marriage is marital property. (Ill.Rev.Stat.1991, ch. 40, par. 503; Hofmann v. Hofmann (1983), 94 Ill.2d 205, 68 Ill.Dec. 593, 446 N.E.2d 499.) Therefore a party claiming that property is nonmarital has the burden of proving its status by clear and convincing evidence. Hofmann, 94 Ill.2d 205, 68 Ill.Dec. 593, 446 N.E.2d 499; In re Marriage of Werries (1993), 247 Ill.App.3d 639, 186 Ill.Dec. 747, 616 N.E.2d 1379.

In support of her contention that the workers' compensation claim is marital property, Wife cites three Illinois cases: Lukas v. Lukas (1980), 83 Ill.App.3d 606, 39 Ill.Dec. 161, 404 N.E.2d 545; In re Marriage of Dettore (1980), 86 Ill.App.3d 540, 42 Ill.Dec. 51, 408 N.E.2d 429; In re Marriage of Thomas (1980), 89 Ill.App.3d 81, 44 Ill.Dec. 430, 411 N.E.2d 552.

Lukas v. Lukas (1980), 83 Ill.App.3d 606, 39 Ill.Dec. 161, 404 N.E.2d 545, held (1) that the injured spouse's workers' compensation award was marital property, and (2) that even if it was not, it had been transmuted into marital property.

The third district later addressed the problem of classifying workers' compensation awards that had accrued during the marriage but had not been received at the time of the dissolution proceeding. In re Marriage of Dettore (1980), 86 Ill.App.3d 540, 42 Ill.Dec. 51, 408 N.E.2d 429; In re Marriage of Thomas (1980), 89 Ill.App.3d 81, 44 Ill.Dec. 430, 411 N.E.2d 552.

In Dettore, the husband had filed a workers' compensation claim before the wife filed her petition for dissolution of marriage. The court held that if the claim for a compensation award accrues during the marriage the award is marital property, regardless of when it is received. The court reasoned that if the "paid out" requirement was dispositive of the marital property issue, the injured spouse would be able to avoid the holding of Lukas by refusing to settle the workers' compensation claim until after the divorce was final. Therefore, the court refused to "condone a result which invites work[ers'] compensation claimants to protract the arbitration for their award so as to shield that award from equitable division by the dissolution court." Dettore, 86 Ill.App.3d at 541-42, 42 Ill.Dec. at 52-53, 408 N.E.2d at 430-31.

Less than three months later, the third district again addressed the issue of whether a workers' compensation claim for injuries incurred during the marriage was marital property. (In re Marriage of Thomas (1980), 89 Ill.App.3d 81, 44 Ill.Dec. 430, 411 N.E.2d 552.) The court cited Dettore as controlling and concluded that the time of accrual of the claim, rather than the date the award is received, governed the classification of the award as marital or nonmarital property. Thomas, 89 Ill.App.3d 81, 44 Ill.Dec. 430, 411 N.E.2d 552.

In In re Marriage of Drone (1991), 217 Ill.App.3d 758, 160 Ill.Dec. 601, 577 N.E.2d 926, this court addressed the issue of whether a husband's workers' compensation settlement check received during the marriage for an injury received prior to the marriage was marital property. Applying the reasoning of Dettore, this court stated that it is reasonable to infer that the time the cause of action accrues determines the classification of this property. (Drone, 217 Ill.App.3d at 764, 160 Ill.Dec. at 606, 577 N.E.2d at 931.) Since the cause of action in Drone had accrued prior to the marriage, the court held that it was nonmarital. The court also held, however, that it had been transmuted to marital property by being placed into a joint checking account and used to make a down payment on a marital home held in joint tenancy.

Husband argues that the case at bar is distinguishable from these cases because this case involves a permanent total disability benefit, rather than a temporary total disability claim. Permanent disability benefits are designed to compensate the injured employee for his or her inability to earn income. Husband argues that part of the permanent award did not accrue during the marriage of the parties. Husband's position is that permanent benefits which accrued during the marriage would be marital property and those which accrued after the dissolution would not be.

In support of this contention, Husband cites a Kentucky case, Mosley v. Mosley (Ky.Ct.App.1985), 682 S.W.2d 462, in which the husband was totally disabled and receiving weekly benefits under the Kentucky workers' compensation act at the time that the marriage was dissolved. Mosley held that permanent total disability payments which had been received, or which had accrued but not actually been paid as of the date of dissolution, were marital property. Payments accrued and received after the date of dissolution were held to be nonmarital.

Husband contends that although the case is not controlling, this court should adopt the reasoning of Mosley because there are no Illinois dissolution cases involving permanent total disability awards, as opposed to temporary total disability benefits. Husband argues that the two situations are distinguishable.

Lukas, Dettore, Thomas, and Drone have all indicated that the time of accrual of the workers' compensation claim determines its status as nonmarital or marital: claims accruing before marriage are nonmarital; those accruing during marriage are marital. Two points must be noted about three of these four cases. First, while both Lukas and Drone ruled that the workers' compensation benefits were marital, both cases relied upon transmutation to establish that the awards were marital. Second, in Dettore, though one cannot tell with certainty the nature of the award, it may have had an element of permanency in it since the case was settled for $35,000. While the statements about classification based on time of accrual that are found in Lukas and Drone are dicta because of their reliance on transmutation and while the statements on the same subject in Dettore lack a specific discussion of the award's temporary or permanent nature, the lack of specificity is not present in Thomas. The...