No. 3--96--0307
_________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D. 1997
_________________________________________________________________
ILLINOIS DEPARTMENT OF PUBLIC ) Appeal from the Circuit Court
AID, ex rel. JACQUELYNN ) of the 9th Judicial Circuit,
JENNINGS, ) Knox County, Illinois
)
Plaintiff-Appellee, )
v. ) No. 92--F--264
RODNEY R. WHITE, ) Honorable
) Greg McClintock,
Defendant-Appellant. ) Judge Presiding.
_________________________________________________________________
JUSTICE McCUSKEY delivered the opinion of the court:
_________________________________________________________________
The defendant, Rodney White, appeals from an order of the
trial court which found his Federal Employers Liability Act (FELA)
settlement was "income" for child support purposes. The trial
court based its finding on section 505 of the Illinois Marriage and
Dissolution of Marriage Act (Act) (750 ILCS 5/505 (West 1994)).
After carefully reviewing the record, we affirm.
FACTS
On October 17, 1989, Jacquelynn Jennings gave birth to Cody
Jennings. The defendant was never married to Jacquelynn. The
Illinois Department of Public Aid (Public Aid) established the
defendant's paternity of Cody on April 16, 1993, and the defendant
was ordered to pay child support. However, on August 26, 1993, the
defendant's child support obligation was abated to zero due to his
lack of income.
On June 15, 1992, the defendant sustained injuries to his back
while employed by Burlington Northern Railroad (Burlington
Northern). Pursuant to FELA, the defendant filed a lawsuit against
Burlington Northern. On September 14, 1995, the defendant settled
his case with Burlington Northern for $200,000.
Subsequently, Public Aid filed a petition to modify the
defendant's child support obligation. The basis of Public Aid's
petition was the defendant's increased income from his FELA
settlement. A hearing was held which determined that the following
expenses were deducted from the settlement amount:
Case expenses: $ 9,285.65
Attorney fees: $ 47,678.59
Personal expenses: $ 7,390.82
Contribution to Railroad
retirement board: $ 6,023.96
Unpaid bills: $ 500.00
___________
SUB-TOTAL: $ 70,879.02
In addition to the above-referenced expenses, the defendant
testified that he borrowed $1,200 per month against his anticipated
settlement for monthly living expenses. The total loan amount was
$37,578.87. The defendant stated that he is currently living with
and supporting his girlfriend, as well as three additional children
he has fathered out-of-wedlock.
The Special Assistant State's Attorney filed two requests to
produce in an attempt to force the defendant to submit
documentation concerning the breakdown of his FELA award. The
defendant never provided the documentation.
During the hearing, the defendant testified that the entire
FELA settlement was for his pain and suffering. The following
exchange occurred during the defendant's cross-examination:
"Q [Special Assistant State's Attorney]: Mr. White, you say
that all of this was for pain and suffering. Do you have a copy of
a settlement statement or agreement in which that is explicitly
stated?
A [The defendant]: That says pain and suffering on it?
Q: Yes.
A: I think so.
Q: Do you have any documentation at all that that was the sole
purpose of the settlement, pain and suffering?
A: Yeah. I think so.
Q: What is the documentation you have?
A: What is it? I don't know what it is. It's somewhere.
It's at home and my other attorney has a copy of it.
Q: But today all we have is your statement?
A: That's correct."
After hearing the evidence, the trial judge said that he was
reluctant to rely solely on the defendant's testimony concerning
the breakdown of the settlement and noted: "I'm concerned because
your client indicated that there were written documents, settlement
documents, that would support that argument. They've not been
tendered to the court. They've not been provided at this point and
that appears to have been the subject of a request by [the Special
Assistant State's Attorney] that has not been complied with at this
stage."
Following the judge's comments, the defendant's attorney
stated, "I would, therefore, request permission from this Court to
provide this Court with the written documentation concerning the
fact that this award was based upon pain and suffering." The trial
judge then gave each side 10 days to submit any written
documentation.
The defendant's attorney submitted three documents to the
court: (1) a letter from the defendant's FELA attorney, Mark
Dupont, in which Dupont states, "I checked my file and we do not
have anything from the railroad to the Railroad Retirement Board
showing that the settlement was paid to factors other than wage
loss;" (2) Dupont's settlement statement showing case expenses and
disbursements; and (3) Burlington Northern's release of all claims,
which does not specify how the award was apportioned.
In a letter to the attorneys after the hearing, the judge
noted, "[t]he release executed by the respondent does not specify
how the award is apportioned. If no portion of the award
represents lost wages, it seems rather unusual that $6,023.96 of
the award was a mandatory contribution to the Railroad Retirement
Board." The judge then concluded that the entire amount, after the
deduction of expenses, would be considered income for calculating
the defendant's child support obligation.
On March 16, 1996, the trial court entered an order. The
court found that the FELA settlement was income and subject to
payment of child support under section 505 of the Act. The court
allowed $70,879.02 in deductions, but did not allow a deduction for
the defendant's loan. The court concluded that the loan "was in
essence a part of the Federal Employer's Liability Act award." As
a result, the trial court determined that the net income for child
support purposes was $129,120.98 ($200,000 minus $70,879.02).
The court then departed from the 20% statutory guideline and
awarded 15% in child support, or $19,368.15. The judge gave three
reasons for his departure from the statutory guideline: (1) the
FELA award was a one-time distribution of a large sum of money
which would be sufficient to pay "regular" child support for a
substantial period of time; (2) the parties have a modest standard
of living which does not mandate strict compliance with the
guideline; and (3) the defendant received no income for a
significant period of time and has other support obligations.
The trial court ordered the defendant to pay the lump sum of
$19,368.15 to the Special Assistant State's Attorney for division
between Public Aid and Jacquelynn. The lump sum was to come from
$20,000 retained in a trust by the defendant's FELA attorney.
ISSUE ON APPEAL
The trial court's decision to depart from the statutory child
support guidelines was not appealed. As a consequence, the sole
issue before this court is whether the trial court erred in
concluding that the defendant's FELA settlement was income for
purposes of determining child support.
ANALYSIS
A. Standard of Review
The findings of a trial judge as to net income and the
awarding of child support are within the sound discretion of the
trial court and will not be disturbed on review absent an abuse of
that discretion. In re Marriage of Freesen, 275 Ill. App. 3d 97,
103, 655 N.E.2d 1144, 1148 (1995).
B. The Definition of Net Income
Section 505 of the Act provides that net income for child
support purposes is "defined as the total of all income from all
sources" minus various enumerated deductions. 750 ILCS 5/505(a)(3)
(West 1994). The Act does not define "income." The question of
whether a FELA settlement, or any portion of it, is income under
the Act is an issue of first impression in this State.
It is well-settled law that the legislature's inclusive
language--"all income from all sources"--is to be broadly applied.
See In re Marriage of Dodds, 222 Ill. App. 3d 99, 103, 583 N.E.2d
608, 611 (1991). Section 505's language has been construed to
include various items such as a tax refund attributable to
maintenance payments made to a former spouse (In re Marriage of
Pylawka, 277 Ill. App. 3d 728, 732, 661 N.E.2d 505, 508 (1996));
deferred compensation contributions (Posey v. Tate, 275 Ill. App.
3d 822, 826, 656 N.E.2d 222, 225 (1995)); a military allowance (In
re Marriage of McGowan, 265 Ill. App. 3d 976, 976-77, 638 N.E.2d
695, 696 (1994)); severance pay received in the year prior to the
period for which support was due (In re Marriage of Benkendorf, 252
Ill. App. 3d 429, 447, 624 N.E.2d 1241, 1253 (1993)); a parent's
"pro forma" capital account to which his firm made allocations
based on the firm's annual performance (In re Marriage of Winne,
239 Ill. App. 3d 273, 285, 606 N.E.2d 777, 784 (1992)); income from
investments and bonuses from a closely held corporation (In re
Marriage of Olson, 223 Ill. App. 3d 636, 652, 585 N.E.2d 1082, 1093
(1992)); passive income from bonds and securities (In re Marriage
of Harmon, 210 Ill. App. 3d 92, 95, 568 N.E.2d 948, 950 (1991));
and non-recurring income (In re Marriage of Hart, 194 Ill. App. 3d
839, 850, 551 N.E.2d 737, 744 (1990)).
Recently, in the case of In re Marriage of DeRossett, No.
80168 (September 19, 1996), the Illinois Supreme Court gave broad
effect to the language of section 503 of the Act. The court
concluded that a worker's compensation award, arising out of a
claim accrued during the marriage, is marital property under
section 503 of the Act. DeRossett, slip op. at 4. The court noted
that the Act's definition of marital property as "all property
acquired by either spouse subsequent to the marriage" creates a
rebuttable presumption that all property acquired after the
marriage is marital property. DeRossett, slip op. at 3.
Given the analogous language of section 505, regarding income
for child support purposes, we hold that section 505 creates a
rebuttable presumption that all income, unless specifically
excluded by the statute, is income for child support purposes.
As the trial court noted, the record is unclear concerning the
apportionment of the defendant's FELA award. The defendant urges
this court to remand the matter pursuant to Villanuava v. O'Gara,
___ Ill. App. 3d ___, 668 N.E.2d 589 (1996). In Villanuava, the
court remanded the cause to enable the parties to present evidence
concerning the apportionment of the respondent's personal injury
award. Villanuava, ___ Ill. App. 3d at ___, 668 N.E.2d at 593.
Without addressing the merits of the Villanuava decision, we
conclude that a remand of the instant case is not warranted because
the trial court has already given the defendant numerous
opportunities to produce the evidence necessary to show that the
award was for elements other than lost wages. Cf. Villanuava, ___
Ill. App. 3d ___, 668 N.E.2d 589.
The record in this case clearly shows that the defendant
failed to produce the requisite information and ignored the Special
Assistant State's Attorney's pre-trial motions. As such, we find
no abuse of discretion in the trial court's determination that the
award was entirely for lost wages. See Dodds, 222 Ill. App. 3d at
103, 583 N.E.2d at 611 (finding that a settlement under the
Worker's Compensation Act (820 ILCS 305/1 et seq. (West 1994)) is
income for purposes of child support).
C. The Personal Bank Loan
Next, the defendant argues that the trial court erred in not
allowing a deduction for the $37,578.87 bank loan which he used for
personal expenses during the pendency of his FELA case. From our
review of applicable law, we find no abuse of discretion in the
trial court's decision to exclude the loan amount as a deduction.
Section 505 of the Act defines net income as all income from
all sources, minus: (a) Federal income tax; (b) State income tax;
(c) social security tax; (d) mandatory retirement contributions;
(e) union dues; (f) dependent and individual health insurance
premiums; (g) prior obligations of support actually paid pursuant
to court order; and (h) expenditures for the repayment of debts
that represent reasonable and necessary expenses for the production
of income. 750 ILCS 5/505(a)(3) (West 1994); Hart, 194 Ill. App.
3d at 849, 551 N.E.2d at 743.
The defendant has offered no evidence or case law supporting
his position that his personal bank loan qualifies as a deduction
under any of the subsections of section 505(a)(3) of the Act. As
such, we conclude that the trial court properly found that the loan
was part of the FELA award and not deductible under section 505 of
the Act. See In re Marriage of Partney, 212 Ill. App. 3d 586, 593,
571 N.E.2d 266, 270 (1991) (disallowing a section 505 deduction for
a loan incurred in order to comply with the parties' property
settlement).
D. Section 706.1 of the Act
In addition, the defendant argues that section 706.1 of the
Act is a more exhaustive definition of what constitutes net income
for child support purposes. Section 706.1 defines income as "any
form of periodic payment to an individual." That section of the
Act is designed to "secure the payment of child support through
third parties who are normally obligated to pay income to the
supporting parent in the form of periodic payments." Dodds, 222
Ill. App. 3d at 104, 583 N.E.2d at 611. The defendant argues that
his one-time FELA settlement does not qualify as income because it
is not a periodic payment. The trial court rejected the
defendant's argument, finding that section 706.1 does not limit the
definition of net income found in section 505.
The defendant's argument was made and rejected by the court in
Dodds, which stated that "[t]he definition of income [in section
706.1] is intended to define the term for the purposes of that
section only; there is no indication that it is intended to define
the term for any other purpose of the Marriage Act." Dodds, 222
Ill. App. 3d at 101, 583 N.E.2d at 610. We find Dodds persuasive
on this issue and find the defendant's argument without merit.
CONCLUSION
For the reasons stated, from our review of the record, we find
no abuse of discretion in the trial court's decision. The trial
court properly concluded, based on the evidence presented, that the
defendant's FELA award was income for child support purposes.
Also, the trial court did not err in refusing to allow the
defendant to deduct from his settlement the amount of a personal
bank loan. In addition, the trial court was correct in rejecting
the defendant's claim that section 706.1 of the Act limits the
definition of net income for child support purposes. Accordingly,
we affirm the judgment of the circuit court of Knox County.
Affirmed.
BRESLIN and HOLDRIDGE, JJ., concur.