In Re Marriage of Harmon

479 N.E.2d 422, 133 Ill. App. 3d 673, 88 Ill. Dec. 809, 1985 Ill. App. LEXIS 2009
CourtAppellate Court of Illinois
DecidedMay 30, 1985
Docket5-84-0676
StatusPublished
Cited by11 cases

This text of 479 N.E.2d 422 (In Re Marriage of Harmon) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Marriage of Harmon, 479 N.E.2d 422, 133 Ill. App. 3d 673, 88 Ill. Dec. 809, 1985 Ill. App. LEXIS 2009 (Ill. Ct. App. 1985).

Opinion

JUSTICE EARNS

delivered the opinion of the court:

Martin Harmon appeals from the judgment of the circuit court of Clay County, which distributed property and fixed child support following dissolution of marriage to Térrie Harmon. Martin contends that the trial court erred when it failed to follow the substantive changes in the law of property disposition brought about by the amendments to section 503 of the Illinois Marriage and Dissolution of Marriage Act, which were in effect when this cause was tried. (Ill. Rev. Stat. 1983, ch. 40, par. 503.)

Effective August 19, 1983, section 503 of the Act was amended by Public Act 83 — 129, which enacted substantial changes which were ignored in the classification and disposition of property in the judgment of dissolution as initially entered. When the amendments to the Act were brought to the attention of the trial court, it conformed the judgment to the scheme of the Act as amended, but did not, in our opinion, follow the substantive requirements of section 503, as amended. See Ill. Ann. Stat., ch. 40, par. 503, Supplement to Historical and Practice Notes, at 46 (Smith-Hurd 1984-85).

The parties were married in 1977. They have two children, and Martin has custody of a child from a previous marriage. Martin owned extensive assets, consisting of real estate, cattle, farm and sawmill equipment, a home and bank accounts and personal items prior to the marriage. At the time of the marriage, Martin was indebted on contracts to purchase real estate. Terrie’s nonmarital property included a car, $200 to $300 in a checking account, clothing and other personal items.

During their six-year marriage, the parties acquired real estate approximating 255 acres, and incurred substantial additional debts. Improvements were made to marital and nonmarital real estate. During the marriage many items of personal property and equipment were acquired by Martin or his corporation, M. D. Harmon, Inc. Both spouses contributed significantly to the successful operation of the corporate business. The record contains extensive and conflicting testimony, accounting reports and appraisals concerning the value of most marital and nonmarital property. Many items of personal property do not appear to have been assigned a value. The parties invite us to enter an appropriate disposition under the power granted us by Supreme Court Rule 366(a)(5) (87 111. 2d R. 366(a)(5)); however, we believe that this record presents a far too complex and contested matter to permit us either to affirm the judgment of the trial court or to make what we might consider appropriate adjustments thereto.

In its original judgment the trial court awarded Terrie $150,000 “in adjustment of her marital rights and contributions.” This was based upon a specific finding that all property held by either party became marital property because of transmutation. (See 111. Rev. Stat. 1983, ch. 40, par. 503(c).) Following further argument on Martin’s petition to modify or vacate judgment, the trial court’s only action was to withdraw its finding of transmutation and affirm the award of $150,000 “as being based upon the wife’s share of the marital property accumulated during the marriage and as fair reimbursement of the wife’s share of the marital contributions made to the husband’s non-marital property during the marriage.” This we believe was an abuse of discretion, in that the amended act unequivocally requires that reimbursement for marital contributions must be traceable by clear and convincing evidence. 111. Rev. Stat. 1983, ch. 40, par. 503(c)(2).

The trial court was guided by our decision in In re Marriage of Brown (1982), 110 Ill. App. 3d 782, 443 N.E.2d 11, and, in following Brown, misapplied the law in effect at the time of the property disposition. Our court in Brown relied heavily on In re Marriage of Smith (1981), 86 Ill. 2d 518, 427 N.E.2d 1239, and In re Marriage of Lee (1981), 87 Ill. 2d 64, 430 N.E.2d 1030, in holding that the husband’s one-half interest in partnership property acquired by gift, although nonmarital property, was transmuted into marital property by commingling with marital property. In an opinion in a second appeal in the same case, however (which was filed after the original judgment in this case, but before the trial court’s amended property disposition order), we recognized that Public Act 83 — 129 constitutes a legislative rejection of the rationale espoused in Smith and Lee. (In re Marriage of Brown (1984), 127 Ill. App. 3d 831, 833, 469 N.E.2d 612, 614.) Even before the effective date of the amendments to section 503 of the Act, in In re Marriage of Olson (1983), 96 Ill. 2d 432, 451 N.E.2d 825, the supreme court said that Smith should not be read so strictly as to render the concept of nonmarital property illusory. Every act of commingling or every use of marital funds for the maintenance of nonmarital property should not work a transmutation. (96 Ill. 2d 432, 440, 451 N.E.2d 825, 829.) The amendments to the Act require a rejection of the concept of transmutation as set forth in Smith and Olson. See generally Feldman & Fleck, Taming Transmutation: A Guide to Illinois’ New Rules on Property Classification and Division upon Dissolution of Marriage, 72 Ill. B.J. 336 (1984).

Feldman and Fleck in their authoritative article note that the new legislation was designed to provide workable standards to lend predictability and consistency to property dispositions following dissolution:

“It prevents the otherwise unavoidable transmutation of most nonmarital property by providing that, when marital funds are contributed to nonmarital property, the nonmarital property retains its classification and the marital funds are transmuted to nonmarital. Conversely, if nonmarital funds are contributed to marital property, the marital property retains its classification and the nonmarital funds are transmuted. Then, to fairly compensate for contributions by one estate to another, and eliminate the unfairness of transmutation, the amendment provides rights to reimbursement for the contributing estate.
Specifically, the amendment changes former law by providing that:
1. The increase in value of nonmarital property, however achieved, is classified as nonmarital property, subject to the right to reimbursement. (Sec. 503(a)(7))
2. The income from nonmarital property, if not attributable to the personal effort of a spouse, is also nonmarital. (Sec. 503(a)(8))
3. When property from one estate has been contributed to property from another estate so that the contributed property loses its identity, the contributed property is transmuted into the character of the recipient estate, subject to a right to reimbursement. (Sec. 503(c)(1))
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Bluebook (online)
479 N.E.2d 422, 133 Ill. App. 3d 673, 88 Ill. Dec. 809, 1985 Ill. App. LEXIS 2009, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-marriage-of-harmon-illappct-1985.