NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).
2024 IL App (3d) 230315-U
Order filed October 29, 2024 ____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
In re MARRIAGE OF ) Appeal from the Circuit Court ) of the 18th Judicial Circuit, MARSHA TATE, ) Du Page County, Illinois, ) Petitioner-Appellant, ) Appeal No. 3-23-0315 ) Circuit No. 14-D-1936 v. ) ) ) WESLEY TATE, ) Honorable ) Anne T. Hayes, Respondent-Appellee. ) Judge, Presiding. ____________________________________________________________________________
JUSTICE BRENNAN delivered the judgment of the court. Presiding Justice McDade and Justice Albrecht concurred in the judgment. ____________________________________________________________________________
ORDER
¶1 Held: The trial court’s finding that certain payments received by husband were sale proceeds from the book of his business and, thus, neither employment income nor subject to maintenance was not against the manifest weight of the evidence. The trial court’s grant of respondent’s motion for declaratory judgment is affirmed.
¶2 Petitioner, Marsha Tate, appeals the trial court’s finding that the payments respondent,
Wesley Tate, receives pursuant to the Aspiring Legacy Financial Advisors Program (ALFA Program) are not “employment income” as defined by the judgment for dissolution of marriage
(judgment) and, therefore, not subject to maintenance payments. For the reasons set forth below,
we affirm the trial court’s judgment.
¶3 I. BACKGROUND
¶4 This is the second appeal in this case. See In re Marriage of Tate, 2019 IL App (2d)
170579-U. The parties were married on May 16, 1987; petitioner filed a petition for dissolution of
marriage on September 19, 2014. At the time of the dissolution trial, respondent was employed as
a financial advisor, or FA, at UBS. Judge John Demling presided over the trial.
¶5 A. Pre-Decree
¶6 The pre-decree record is voluminous, and we recount the evidence only as it pertains to the
issue on appeal—whether the ALFA payments are “employment income” subject to maintenance
payments or, instead, proceeds from the sale of respondent’s book of business and exempt from
the maintenance calculation.
¶7 Dennis Christensen, the UBS branch manager, testified regarding respondent’s
employment. Christensen was instrumental in respondent’s transition from his prior employer,
Morgan Stanley, to UBS, including forging an agreement between respondent and UBS wherein
respondent would receive a financial incentive to become a UBS employee. As noted in the first
appeal, this is also known as an “employee transition program” (ETP), and can be described as
follows:
“[A] type of compensation structure utilized in the financial services industry to recruit and
retain employees. Pursuant to an ETP, an employee receives money at the time of hire
based on recent revenue produced. The upfront payments are in the form of ‘loans’ that are
2 forgiven annually over an extended contract period. However, the loans are only forgiven
as long as the recipient remains employed at the company throughout the contract term.”
Tate, 2019 IL App (2d) 170579-U, ¶ 10.
¶8 “The amount [of loans] forgiven each year is treated as taxable income in the year it is
forgiven ***.” Id. ¶ 12. Respondent earned a guaranteed cash loan up front and additional cash
loans once he was successful in transferring his client accounts from Morgan Stanley to UBS. His
loans were forgiven over a period of eight years (2011-2019).
¶9 At the time of trial, respondent’s assets under management were more than double what
they were when he was hired by UBS in 2011, and his 12-month trailing commission had increased
by $900,000.
¶ 10 Christensen later described the ALFA Program as a “retirement program” available to
eligible financial advisors. He indicated that the first three years of the ALFA Program were
considered active service for the ETP loan forgiveness. Respondent’s testimony suggested that he
did not have any immediate plans to retire. On cross-examination, respondent testified to the
ALFA Program as follows:
“Q. So if you chose to retire, you can seek the benefits of the Alpha [sic] Program;
can you not?
A. The benefits are crap.
Q. Can you seek the benefits of the Alpha [sic] Program?
A. I don’t see them as benefits.
THE COURT: The question is: Can you seek—can you attempt to get them, if you
want?
THE WITNESS: Can I attempt to get them?
3 THE COURT: Yes.
THE WITNESS: Yeah, but they don’t exist.
MR. SCHILLER: Well, the record has Mr. Christenson’s [sic] testimony, so I’m not
going to argue with him.”
Petitioner’s counsel attempted to continue this line of questioning, at which point respondent’s
counsel objected to the subject being outside the scope of the direct examination. The pre-decree
trial court sustained the objection on the grounds of relevancy, stating that it was not going to make
its determination based upon speculation as to what respondent might do in the future. The pre-
decree trial court said that was an issue for another time.
¶ 11 The pre-decree trial court received as evidence the 2016 financial advisor compensation
plan, which included a synopsis of the ALFA Program, describing it as an opportunity for retiring
financial advisors “to smoothly transition client accounts to other Financial Advisors and continue
to receive compensation from those accounts for up to five more years, subject to the terms and
conditions of the controlling documents.” It explained that the retiring financial advisor “may be
eligible to remain as active employees for up to two years” “to assist in the book transition[.]”
(Emphasis added.) It was also highlighted that the payments were based on actual production
during the program.
¶ 12 The July 17, 2017, judgment set forth the following findings as they relate to the issue on
appeal:
“7. The Marital Estate
***
7.4 The Court has considered all the factors set forth in Section 503(d) in making its
determination with respect to the disposition of assets.
4 7.5 The Court finds that [respondent] has a far greater ability to acquire capital assets and
income in the future. ***.
7.7 The court finds that, given the extent of the marital estate, both parties will be in a
relatively strong economic position when the division of property becomes effective. ***
However, [respondent] certainly has greater employment skills and employability.
7.9 After considering the factors set forth in Section 503(d), the evidence presented at trial,
and the arguments of counsel, the Court believes that a disproportionate share of marital
assets is equitable under the circumstances. *** The Court does not intend to make a
specific percentage allocation but notes that the allocation of assets is slightly greater than
60 percent in favor of [petitioner] and slightly less than 40 percent in favor of [respondent].
7.11 The Court finds that, with respect to indebtedness, the primary indebtedness of the
parties are the loan balances to UBS as a result of the promissory notes outstanding related
to [respondent]’s employment. The Court notes that this indebtedness is indeed contingent
indebtedness. And the exact outstanding balance depends on [respondent]’s employment
with UBS.
7.12 The Court also finds that this indebtedness is affected by the ALFA program which
will also reduce the indebtedness to UBS for these loans in the event of [respondent]’s
retirement. Based on the foregoing, any and all indebtedness to UBS as a result of the
outstanding loans through his employment with UBS are awarded to [respondent].
5 9. Maintenance
9.6 The Court will award maintenance in the amount of $15,000 per month. In addition,
[petitioner] shall receive as additional maintenance 40 percent of any monies received in
excess of a gross of $450,000.
9.7 In essence, the Court is awarding maintenance in the amount of 40 percent of the funds
received by [respondent].
9.8 The Court finds that [respondent]’s income is made up from a number of sources. For
the purposes of support, monies received by [respondent] will include his salary,
performance bonuses, commissions, loan proceeds he receives or controls as incentives
and for his performance, as well as investment income from all sources ***. This additional
40% of income payment shall be calculated, trued up and paid on a quarterly basis.”
(Emphases added.)
¶ 13 Thereafter, the court ordered as follows:
“Article II. Maintenance
b. Based upon the evidence presented, the Court awards maintenance payable by
[respondent] to [petitioner] ***. In addition, [petitioner] shall receive from [respondent]
as additional maintenance 40 percent of any monies received by [respondent] as defined
in c. below in excess of an annual gross of $450,000. ***.
c. For purposes of support, monies received by [respondent] shall include all employment
income including salary, bonuses, incentive loans and awards in the form of loans from
6 his employment, commissions, and investment income from all sources except investment
income from his share of the marital estate.
Article III. Disposition of Property
b. All indebtedness to UBS as a result of the outstanding loans through [respondent]’s
employment with UBS are [respondent]’s responsibility. ***.”
¶ 14 B. Post-Decree
¶ 15 Due to unrelated maintenance disputes that arose post-decree, petitioner issued a subpoena
to UBS seeking documentation regarding respondent’s income. Pursuant to the subpoena, UBS
produced a paystub showing that, in September 2020, respondent received an ALFA payment in
the amount of $1,379,108.38. Respondent had apparently entered the ALFA Program in August
2019. Judge Anne Hayes presided over the post-decree declaratory judgment proceeding that
ensued.
¶ 16 i. ALFA Program
¶ 17 Due to the complex nature of the ALFA Program, we first provide a background of the
program based upon documentary evidence received in the declaratory judgment proceeding that
is the subject of this appeal. The ALFA Program serves to transition a retiring financial advisor’s
client accounts to another UBS financial advisor and has two phases—ALFA Plus and ALFA
Core. “Together, they give eligible FAs the opportunity to earn up to 300% of their production
over the course of the program.” The 2019 financial advisor compensation plan describes, the first
phase, ALFA Plus, as follows:
7 “Qualifying FAs sign in an agreement in a form then provided by the Firm (“Commitment Agreement”) to enter ALFA Core within a 2- to 5- year period (“Commitment Period”). In return for signing the Commitment Agreement, these FAs receive up to 100% of their trailing 12-month production (at time of Commitment Agreement execution) as an upfront cash loan ***. The upfront loan is provided in addition to any ALFA Core payments for which the FA may qualify under ALFA Core. ***.” 1 (Emphases omitted.)
The 2019 compensation plan describes ALFA Core as follows:
“Legacy FAs are eligible to receive monthly payments for a 5-year period—2 years as an employee (Active Phase) and 3 years post-employment (Inactive Phase). Legacy FAs have an opportunity to earn up to 200% of production on the transitioned accounts over the course of the 5 years ***. *** ALFA Core offers a survivor death and disability benefit if the Legacy FA dies or experiences a disability during the 5-year period that results in the inability to maintain required registrations and/or complete all required continuing education/training responsibilities.”
¶ 18 The head of UBS’s recruiting and retention group, David Larado, authored an article
(Larado Article) describing UBS’s “compensation and reward” structure, including the ALFA
Program. The article described the ALFA Program as a “reward[] *** for transitioning your
business on your timeline to advisors of your choice and preserving client relationships.”
(Emphases added.) It also provided, “Our highly flexible ALFA program rewards you for the
business you have built over the life of your career and allows you to continue to earn income
during the transition period.” (Emphasis added.) Additionally, “We are incredibly proud of our
ALFA program, which is among the most competitive transition programs in the industry and is
focused on what matters most—you and your clients.” (Emphasis added.)
¶ 19 Jane Eisland, a UBS executive director, authored a separate article (Eisland article), which
begins with the phrase, “Transition your business on your terms.” (Emphasis added.) Like the
1 Respondent elected not to take the upfront loan and, instead, received the ALFA Plus monies as staged
payments over four years.
8 Larado article, it describes the ALFA Program as a reward for the business built by the financial
advisor. The section pertaining to ALFA Core provides, “Upon entering ALFA Core, you
transition your book to a successor Financial Advisor and remain an active employee for a period
of time, ensuring a smooth transition for you and your clients.” (Emphases added.)
¶ 20 A 2017 ALFA Program overview document stated, “ALFA gives you the freedom to
gradually reduce your responsibilities while being rewarded for the business you’ve worked to
build.”
¶ 21 Respondent’s ALFA Plus Commitment Agreement, dated August 22, 2019, set forth the
specific dates and terms of his participation in the ALFA Program as follows:
“Commitment Period. ALFA Plus begins with the Commitment Period, which is scheduled to begin on 8/1/2019 (‘Commitment Period Start Date’) and end on 8/1/2021 (‘Commitment Period End Date’). During the Commitment Period you will remain a full-time at-will employee and will continue to work as a Financial Advisor. In exchange for the ALFA Plus Commitment Benefits ***, you have voluntarily agreed to enter the ALFA Core component of ALFA (‘ALFA Core’) as a Legacy FA on 8/1/2021 (‘ALFA Core Start Date’). In order to enter ALFA Core, you must satisfy the ALFA Core eligibility requirements in effect immediately before the ALFA Core Start Date. This includes your satisfying and complying with all ALFA Core requirements, including, without limitation, entering into an ALFA Core Legacy FA Agreement.
ALFA Core Transition Period. As a Legacy FA in ALFA Core, your ALFA Core Transition Period will consist of two phases: an Active Phase and an Inactive Phase. The Active Phase is scheduled to begin on the ALFA Core Start Date and end on the date your employment terminates (‘Employment Termination Date’), which you have voluntarily agreed will be on 9/30/2023. During the Active Phase, you remain a full-time at-will employee. The Inactive Phase is scheduled to begin on your Employment Termination Date and end on 7/31/2026 (‘Scheduled Inactive Phase End Date’). During the Inactive Phase you will no longer be an employee of the Firm.” (Emphases in original.)
An August 17, 2021, letter from UBS to respondent indicated that the ALFA Core Start Date was
changed, at respondent’s request, to August 1, 2022.
9 ¶ 22 Respondent signed the ALFA Plus Transition Payment Award Agreement, which reflected
the specific terms of his receipt of the ALFA Plus payments. Respondent’s payments were set
forth as follows: $1,379,108.38 in September 2020; $1,350,989.16 in September 2021;
$1,322,869.94 in September 2022; and $1,294,750.72 in September 2023. UBS was not required
to make these payments if respondent failed to enter and complete ALFA Core for any reason
other than death, disability, or termination without cause. In the event of death, disability, and
termination without cause, UBS would make the remaining ALFA payments as a discounted
accelerated lump sum to respondent or his estate. Respondent’s right to the payments was also
conditioned on him not performing in a manner that significantly contributes to UBS’s financial
loss or significant downward restatement of published results or engaging in conduct that is
detrimental to UBS. Respondent was also subject to non-competition and non-solicitation clauses.
The ALFA Plus payments “are not earned *** until all conditions in this Agreement are satisfied,
including, without limitation, entering and completing ALFA Core ***.”
¶ 23 The ALFA Core Agreement, dated August 30, 2022, welcomed respondent to the ALFA
Core phase and indicated that Alan Wojtowicz was taking over respondent’s client accounts. As
such, respondent “committed to use [his] best efforts to ensure a successful transition of the ALFA
Accounts ***.” As of the start date, respondent began receiving monthly continuation fees, which
are calculated as a percentage of the gross production of the ALFA accounts. All payments during
this time are subject to withholdings and deductions and are reported on a W-2. He is also subject
to non-solicitation and non-competition clauses through ALFA Core. In the event of respondent’s
death or disability during ALFA Core, ALFA Core provides a survivor/total disability benefit.
10 ¶ 24 Collectively, the ALFA Plus Transition Payment Award Agreement, ALFA Plus
Commitment Agreement, and ALFA Core Agreement are hereinafter referred to as “the
Agreements.”
¶ 25 ii. Motion for Declaratory Judgment
¶ 26 On December 7, 2020, petitioner filed an amended petition for rule to show cause alleging,
inter alia, that respondent failed to disclose his entry into the ALFA Program and to pay
maintenance on the payments received. In response, respondent argued that the judgment did not
require him to disclose his participation in the ALFA Program or pay maintenance on the funds
received therefrom.
¶ 27 On September 7, 2021, respondent filed the operative motion for declaratory judgment,
asking that the trial court find that
“the funds [respondent] receives via the UBS Aspiring Legacy Financial Advisor Program
(“ALFA Program”) are neither ‘employment income’ nor ‘monies received by
[respondent] *** for his performance ***’ as defined by the Judgment for Dissolution of
Marriage ***, but rather funds paid to him for his book of business; and, because Marsha
already has received substantial maintenance and a disproportionate share of the marital
estate, she is precluded from double-dipping and sharing in the proceeds from the book of
business as well under Illinois law.”
Respondent characterized his book of business as his personal goodwill and set forth two
arguments: (1) petitioner’s receipt of any portion of the ALFA payments/proceeds from the book
of business would constitute an impermissible double dip since she already received a “substantial
maintenance” award and a disproportionate share of the marital estate and (2) the ALFA payments
were not “employment income” as defined by the judgment. In support of his motion, respondent
11 attached an affidavit of Brian Neville, an attorney who frequently represents financial advisors in
employment transitions and has advised “hundreds of clients on how to monetize their book of
business[.]” Neville’s conclusions are discussed in further detail as part of his testimony below.
¶ 28 Petitioner filed her amended response, arguing that the ALFA payments do not represent
the proceeds from the sale of a book of business; rather, they represent earned commissions from
the client accounts and, therefore, are “employment income” subject to maintenance payments.
Petitioner also raised the affirmative defenses of judicial estoppel, res judicata, collateral estoppel,
and the law-of-the-case doctrine. Petitioner relied upon an affidavit of Scott Matasar, an attorney
whose experience includes negotiating and drafting practice acquisition agreements for the sales
of books of business. His conclusions are discussed in greater detail below within the discussion
of his testimony.
¶ 29 On March 15, 2023, petitioner filed a motion in limine to bar Neville’s testimony, arguing
that the Agreements are unambiguous and, thus, extrinsic evidence to interpret or explain the same
would be improper.
¶ 30 On March 20, 2023, the hearing on respondent’s motion for declaratory judgment
commenced. The trial court first addressed petitioner’s motion in limine. The trial court denied the
motion because it would be premature to exclude Neville’s testimony as a whole. Instead,
petitioner was invited to object to the relevance of specific testimony as it arose. The trial court
distinguished this question from a breach of contract case where enforcement of the underlying
contract was at issue and extrinsic evidence was inadmissible. This was not a contract dispute, but
rather, a disagreement between respondent and petitioner, a non-party to the Agreements, over
whether the monies provided to respondent under the Agreements constituted income for purposes
of calculating maintenance.
12 ¶ 31 a. Brian Neville
¶ 32 Respondent called Brian Neville as an expert witness. Among other work, Neville has
represented individuals contemplating entering the ALFA Program.
¶ 33 Neville testified that, apart from a financial advisor’s regular compensation of fees and
commissions, they can earn additional monies if they transfer firms and bring their clients with
them. He described the process of financial advisors transitioning between firms as follows:
“A. The successful financial advisor, so financial advisors who have accumulated
what the industry calls a significant book of business, so that means their clients are
frequently recruited by other firms to move from the first firm to the second firm, and that
process is generally called transitioning ***.”
Neville defined a book of business as follows:
“A. The general concept of a book of business in the financial services industry is as
a financial advisor you have loyal clients, and those clients would, typically follow you
from one firm to the other. And that book of business is seen as yours because it does move
with you. And that kind of concept is referred to frequently, in particular in the recruiting
world of the industry.
And it’s really the revenue stream that is created by the assets under management
that most people, I think, would call the book of business.”
¶ 34 The transition between firms is often referred to as “monetizing” a book of business, which
generally cannot be done successfully until later in a financial advisor’s career, after they have
established goodwill with their clients. He described the ETP term as the firms “renting or leasing
[a financial advisor’s] book ***.”
13 ¶ 35 Neville explained that financial advisors can also sell their books of business internally at
the firm as part of a retirement program like the ALFA Program. Programs like this were created
to prevent financial advisors from selling their books of business to third parties upon retirement.
Respondent “very easily” could have sold his book of business to a third party rather than entering
the ALFA Program. Neville opined that UBS would not pay financial advisors “300 percent of
their trailing 12” if UBS thought that they themselves controlled the client relationships.
¶ 36 Due to a regulatory rule that financial advisors cannot split fees or commissions with
someone who is not a licensed financial advisor, the retiring financial advisor is required to remain
registered since the ALFA Program pays a percentage of the fees generated from the book of
business. The ALFA payments respondent receives for UBS’s purchase of his book of business
are “separate and distinct” from the regular fees and commissions he earned through his work as
a financial advisor.
¶ 37 Neville’s ultimate opinion is that the ALFA payments “are not compensation for
[respondent’s] ongoing efforts but are compensation for his sale of his book of business” and that
it is “the sale of [respondent]’s personal goodwill because it was his book of business that he
created over his whole career. Those clients were loyal to him.” The “functional reality” is that the
financial advisors control the relationship with clients, not UBS, because the financial advisors
could sell their books of business elsewhere.
¶ 38 b. Wesley Tate
¶ 39 Respondent testified next. He stated that, as of August 2022, he was in the ALFA Core
phase. Prior to ALFA Core, his daily duties included soliciting clients; servicing the book of
existing clients; managing estate plans, tax issues, and client’s family issues; and managing client
assets. Per the transition, the book is now run by Wojtowicz, who also undertakes these day-to-
14 day tasks. The fees and commissions on respondent’s earnings statements were “zeroed out” once
he was in transition, as they were no longer attributed to him. Respondent was no longer required
to contact clients, go into the office, or talk with Wojtowicz about the client accounts. At the time
of the hearing, respondent no longer acted as a financial advisor at all.
¶ 40 Respondent characterized the monetization of his book of business as the firm purchasing
the revenue stream from his book of business for a certain period of time (the duration of the ETP).
Respondent testified that his book of business did not have any value between 2011 and 2019 (the
term of the ETP with UBS) because he would have had to pay UBS back all the money that they
paid him pursuant to the ETP, as the forgivable loans were subject to his continued employment.
Nonetheless, he confirmed that he could have moved to a different firm during that time, it just
would have been a zero-sum gain with the loan repayment.
¶ 41 At the time of the declaratory judgment hearing, respondent had received three of the four
ALFA Plus payments, as well as some of the ALFA Core payments.
¶ 42 c. Jane Eisland
¶ 43 Petitioner called Eisland, who testified “as the person most qualified *** to testify about
the UBS Aspiring Legacy Financial Advisor Program and UBS financial advisor compensation.”
At the time of the hearing, her duties were to “educat[e] the financial advisors about the ALFA
Program” by giving training and seminars on the ALFA Program. Eisland was instrumental in the
development of the ALFA Program, as she was one of the people who led the design team.
¶ 44 Eisland was questioned about her Eisland article and specifically regarding her description
of the ALFA Program as a reward for the business built by financial advisors. She explained, “We
are rewarding them for the business that they have built.” She described this phrasing as “colloquial
terms” but provided the following answers on cross-examination:
15 “Q. Okay. I just want the record to be a little bit clearer. So when you use the term
“business” there, you’re referring to a book of business, correct?
A. Yes, that’s what we call it.
Q. *** And before business you used the term you, you’re using that in a common
way, right?
A. Yes.
Q. Okay. So you’re—so when you use the term your, what you’re saying is to the
recipient of this message, the book of business it belongs to you, that’s accurate, correct?
A. That you service, yes.
Q. All right. The second sentence there says, It rewards you for the business you
have built over the life of your career.
That’s your—your writing, correct?
Q. All right. And so when you say “you,” you’re talking to the recipient of this
document, right?
Q. Who is a financial advisor, correct?
Q. And when you’re talking—you use the term business, you’re referring to book of
business, correct?
16 A. Yes.
Q. And when you talk about built over the life of your career, so that refers back to
the book of business, right?
Q. Okay. And when you say the life of your career, you’re referring to essentially
the clients and the book that the financial advisor has accumulated in their career as a
financial advisor; true?
A. Yes.”
After this exchange, Eisland asserted that “book of business” means the accounts that a financial
advisor is servicing, and that the accounts are owned by UBS. She later included the “past and
hopefully future” stream of income generated from the client’s assets within the definition of
“book of business.”
¶ 45 Respondent’s counsel further pointed to the portion of the Eisland article that states, “Upon
entering ALFA Core, you transition your book to a successful financial advisor.” Eisland, again,
stated that this refers to the book of business and that the financial advisor is “paid to transfer his
book of business to another FA.” Although Eisland stated that UBS does not purchase anything
from the financial advisors through the ALFA Program, she agreed on cross-examination that the
process entails “a financial advisor [being] paid money, transition[ing] his book of business to
UBS, and then leav[ing] it there[.]”
¶ 46 Eisland testified that all monies paid under the ALFA Program are reflected in the
recipient’s W-2 earnings. However, she agreed that, upon entering the ALFA Program, there is the
expectation that the financial advisor will officially separate from employment at UBS during
ALFA Core. Because the monies received under ALFA Core will still be reflected on a W-2, even
17 after the financial advisor is no longer a UBS employee, Eisland agreed that the monies received
in the ALFA Program have no connection to an individual’s employment status.
¶ 47 d. Scott Matasar
¶ 48 Matasar testified as petitioner’s expert witness. He acknowledged that he could not recall
an instance where he represented a client who sought to enter the ALFA Program.
¶ 49 As part of his quest “to determine what the ALFA plan is and is not[,]” Matasar did not
feel it necessary to interview respondent because his “subjective opinion” would not have been
relevant to his analysis. Matasar arrived at his conclusion by looking at the ALFA Program
documents and applying his specialized knowledge of the financial services industry.
¶ 50 Matasar concluded that the ALFA Program does not effectuate a sale of respondent’s book
of business because (1) the program documents do not use the terms “buy” or “sell”; (2) the monies
are treated as W-2 wages; (3) UBS has the unilateral right to terminate the program; and (4)
respondent’s receipt of the monies is contingent upon his continued employment.
¶ 51 Matasar testified that the lack of the terms “buy” and “sell” was significant, and
“[c]ontracts need to be reviewed and accepted on their face absent an ambiguity.” Matasar found
the ALFA payments’ inclusion on respondent’s paystubs and W-2 was indicia that this was not a
buy/sell arrangement.
¶ 52 Matasar explained that the overall structure and operation of the ALFA Program show that
it does not effectuate the sale of a book of business. The ALFA Program is imposed “by fiat”
because UBS determines who can join based upon financial metrics and there is no negotiation
over the payments received. The ALFA payments are also tied to employment, unless the financial
advisor dies, becomes disabled, or is terminated without cause. UBS has “tremendous amounts of
18 latitude to determine a for cause termination which would then terminate the payments owed to
[respondent].” “It makes the idea that this is a purchase or an acquisition of a book illusory.”
¶ 53 Matasar concluded that respondent did not own his book of business and, therefore, could
not have sold it. He stated that the clients that came with respondent to UBS from Morgan Stanley
became UBS’s clients. What respondent is being paid for pursuant to the ALFA Program is “using
his best efforts to introduce a succeeding advisor and perform a warm handshake.”
¶ 54 e. Ruling
¶ 55 On June 9, 2023, the trial court granted respondent’s motion for declaratory judgment,
finding that the ALFA payments did not constitute employment or investment income for
maintenance purposes.
¶ 56 In reaching its decision, the trial court noted that Eisland’s testimony was “extremely
helpful, and determinative of what [respondent] is being paid for in this UBS program.” Given
Eisland’s significant contribution to the development of the ALFA Program, she was able to testify
to many of the documents designed by UBS to explain and advertise it. The trial court cited the
various UBS documents that indicated the financial advisors were being rewarded for their
business and paid to transfer it to a successor. The finding was further supported with the following
evidence.
¶ 57 It was immaterial that the ALFA payments were shown on respondent’s W-2, as Eisland
confirmed that the payments lacked any connection to an individual’s employment status. This is
illustrated by the fact that while a UBS employee is in the inactive phase of ALFA Core, they are
no longer considered an employee, yet they continue to receive ALFA payments that are reflected
on their W-2. Likewise, while the ALFA payments are memorialized on an employee’s paystub,
they are reflected on a separate line item from the fees and commissions earned through the regular
19 work as a financial advisor. As such, an individual in the ALFA program receives two distinct
streams of income: (1) compensation for the production generated by clients and (2) payments for
the book of business.
¶ 58 The trial court was also unpersuaded by the argument that certain requirements imposed
on an ALFA Program participant rendered the ALFA payments “employment income,” as “a
number of the requirements for both ALFA Plus and ALFA Core are regulatory in nature, and are
required, but do not affect at least in this Court’s mind what these moneys are for.” Moreover, the
fact that respondent was required to remain a full-time employee during the ALFA Plus phase was
inconsequential to the analysis, as the retiring financial advisor and the field leaders had the
discretion to determine the appropriate level of the retiring financial advisor’s involvement in
servicing the accounts to be transitioned.
¶ 59 While the trial court found Matasar to be a credible witness, he failed to establish the
connection between the ALFA Program and respondent’s employment activities necessary to
support a finding that the ALFA payments are employment income.
¶ 60 The experts agreed that neither respondent nor UBS owned the clients per se; however, the
“functional reality” is that UBS, through the ALFA Program, seeks to capitalize on the
relationships created and maintained by respondent, not by UBS, and keep the clients with UBS
after respondent’s departure. This is further supported by respondent’s track record of success in
bringing clients with him from one firm to another. “This speaks to the depth of the relationship
between [respondent] and his clients for his trusted advice, and it is this which UBS is paying for.”
If UBS owned the client relationships, there would be no need to pay the retiring financial advisors
to transition the clients to UBS.
20 ¶ 61 The trial court emphasized that respondent does not necessarily have to be employed to
receive the ALFA payments. The entry into ALFA Core, which contemplates that respondent will
eventually no longer be a UBS employee, was a requirement of the ALFA Program. Moreover,
the ALFA payments were still payable to respondent or his estate in the event of his death or total
disability, albeit in a discounted and accelerated manner, despite that he would no longer be a UBS
employee under these scenarios. Conversely, the commissions and fees respondent received by
virtue of his employment as a financial advisor would cease upon his death.
¶ 62 In granting the motion for declaratory judgment, the trial court further found that the
possibility of respondent monetizing his book of business was considered by the pre-decree trial
court and contemplated in the judgment. During the pre-decree trial, petitioner’s counsel reminded
the court that the value of respondent’s book of business spoke to the parties’ abilities to acquire
capital in the future. Thus, the trial court reasoned, “It is clear the parties thought this might happen,
and [petitioner] was compensated for this possibility by receiving a disproportionate division of
the marital estate.” Accordingly, for petitioner to now receive a portion of the ALFA payments as
maintenance would represent a double dip.
¶ 63 Petitioner timely appealed.
¶ 64 II. ANALYSIS
¶ 65 On appeal, petitioner argues the ALFA payments constitute “employment income”
pursuant to the judgment and are thus subject to maintenance, a conclusion she contends
inextricably follows from the legal interpretation of the Illinois Marriage and Dissolution of
Marriage Act (Act) (750 ILCS 5/504 (West 2016)), the judgment, and the Agreements.
Specifically, petitioner argues that (1) the ALFA payments are “income” under the Act; (2) the
plain language of the judgment illustrates that the pre-decree trial court contemplated a broad
21 definition of “employment income” from which respondent was to pay maintenance; (3) the plain
language of the Agreements reinforces the inclusion of ALFA payments in maintenance income;
and (4) the trial court erred in relying upon extrinsic evidence to interpret the Agreements.
Petitioner also argues that the trial court’s finding that petitioner would receive a double dip if she
shared in the ALFA payments misinterpreted the judgment and misapplied case law pertaining to
personal goodwill. Lastly, petitioner contends that several equitable legal doctrines prevent
respondent from claiming to own a book of business for the first time years after the judgment was
entered. For the reasons that follow, we affirm the trial court’s judgment.
¶ 66 A. Standard of Review
¶ 67 As an initial matter, we note that the parties disagree as to the applicable standard of review.
Petitioner contends that de novo review is appropriate and that the issues presented are purely legal
in nature, whereas respondent urges that the trial court’s ruling should be reviewed for an abuse of
discretion because the trial court made factual determinations as to whether ALFA payments
constitute “employment income” after an evidentiary hearing.
¶ 68 The appropriate standard of review for a motion for declaratory judgment is entirely
“depend[ent] upon the nature of the circuit court proceeding.” Oak Run Property Owners Ass’n,
Inc. v. Basta, 2019 IL App (3d) 180687, ¶ 50. In recognition of the “special competence” of the
trial court in making factual determinations, “[w]hen we are reviewing a type of decision that the
trial court was better qualified to make, we must proceed with due recognition of the trial court’s
superior vantage point.” In re Marriage of Rife, 376 Ill. App. 3d 1050, 1058-59 (2007). Decisions
to which we must exercise great deference include assessments of witness credibility and the
weight to assign conflicting evidence. Pekin Insurance Co. v. Hallmark Homes L.L.C., 392 Ill.
App. 3d 589, 593 (2009) (citing Rife, 376 Ill. App. 3d at 1058-59). On the other hand, where no
22 factual determinations are made and the issues presented are purely legal in nature, a trial court’s
judgment is reviewed de novo. Pekin Insurance Co., 392 Ill. App. at 593.
¶ 69 As discussed in more detail below, petitioner’s characterization of the issues as nothing
more than the interpretation of the Agreements, judgment, and the Act misconstrues the
declaratory judgment proceedings as a whole and disregards nearly all of the evidence presented
therein. The sole issue at the center of this case is whether the ALFA payments constitute
“employment income,” which is a factual question that required the trial court to assess witness
credibility and weigh various conflicting testimony. Indeed, the trial court conducted an
evidentiary hearing and heard expert testimony from both parties. As such, we review the trial
court’s ruling with deference and against the manifest weight of the evidence. 2 Petersen v.
Petersen, 58 Ill. App. 3d 272, 275 (1978) (“The findings of a divorce court are generally presumed
to be correct and a reviewing court will not set aside the trial court’s findings unless they are clearly
against the manifest weight of the evidence.”). “A judgment is against the manifest weight of the
evidence only when an opposite conclusion is apparent or when findings appear to be
unreasonable, arbitrary, or not based on evidence.” Judgment Services Corp. v. Sullivan, 321 Ill.
App. 3d 151, 154 (2001). The manifest weight of the evidence standard of review affords the trial
court great deference, as it “is in a superior position to determine and weigh the credibility of
witnesses, observe witnesses’ demeanor, and resolve conflicts in their testimony.” Wade v. Stewart
Title Guarantee Co., 2017 IL App (1st) 161765, ¶ 59.
¶ 70 B. Trial Court’s Consideration of “Extrinsic Evidence”
2 Factual determinations in a declaratory judgment proceeding have also been reviewed for an abuse of
discretion. Oak Run Property Owners Ass’n, Inc., 2019 IL App (3d) 180687, ¶ 50. Nonetheless, under either standard,
our analysis remains unchanged.
23 ¶ 71 As an initial matter, petitioner argues that the trial court erroneously considered what she
characterizes as “extrinsic evidence” in making its determination. According to her theory, the
Agreements unambiguously set forth the terms of respondent’s participation in the ALFA Program
and therefore are the sole evidence to be considered when resolving the question of whether the
ALFA payments constitute “employment income.” Petitioner contends that the four corners rule
applies and the use of extrinsic evidence to contradict or supplement the terms of the Agreement
is improper. The four corners rule is a contract interpretation principle. Air Safety, Inc. v. Teachers
Realty Corp., 185 Ill. 2d 457, 462 (1999). “If the language of the contract is facially unambiguous,
then the contract is interpreted by the trial court as a matter of law without the use of parol
evidence.” Id. We address this argument first, as the purported extrinsic evidence serves as the
backdrop for this case.
¶ 72 Petitioner’s reliance on the four corners rule to render inadmissible the testimony at issue
is unavailing. The determinative issue here, whether the payments were in exchange for
employment performance, is not a matter of contract construction and, therefore, the Agreements
cannot be considered in isolation. This fact was noted by the pre-decree trial court in its denial of
petitioner’s motion in limine regarding Neville’s testimony. Indeed, the evidence to which
petitioner objects is not extrinsic evidence at all. It was not offered or considered to interpret the
terms of the Agreements. It was presented, instead, to provide context as to the purpose of the
ALFA payments, i.e., whether they represent proceeds from the sale of respondent’s book of
business as opposed to for respondent’s employment performance.
¶ 73 For these reasons, the trial court properly considered evidence beyond the Agreements.
¶ 74 C. Employment Income vs. Sale of Book of Business
24 ¶ 75 We next turn to the dispositive issue—whether the trial court’s finding that the ALFA
payments are not “employment income” and, instead, represent the proceeds from respondent’s
sale of his book of business, was against the manifest weight of the evidence. In support, petitioner
focuses primarily on language from the Agreements to support her argument that the ALFA
payments, as a matter of law, constitute “employment income” rather than the proceeds from the
sale of respondent’s book of business.
¶ 76 Specifically, petitioner points to the Agreement language demonstrating that the ALFA
payments are “employment income” because they are tied to respondent’s employment with UBS.
While there is certainly language in the Agreements that, in isolation, might support petitioner’s
theory, it remains the case that the Agreements were drafted to set forth UBS’s and respondent’s
legal rights and obligations, and not to explain the purpose of the ALFA Program as a whole or
how monies advanced under the ALFA Program should be characterized for purposes of deciding
maintenance.
¶ 77 In a similar vein, petitioner asserts that the W-2 reporting status of the ALFA payments
conclusively shows that they are “employment income.” Respondent counters with In re Marriage
of Rogers, 213 Ill. 2d 129, 137 (2004), and In re Marriage of McGowan, 265 Ill. App. 3d 976, 979
(1994), for the proposition that income for taxation can be defined differently than income for
support, as the two calculations serve distinct purposes. Cf., McGowan, 265 Ill. App. 3d at 979;
Rogers, 213 Ill. 2d at 137 (“[T]he Internal Revenue Code is designed to achieve different purposes
than our state’s child support provisions.”). Similarly, UBS’s and the Internal Revenue Code’s
designation of the ALFA payments as W-2 wages for taxation purposes is not determinative of
whether it constitutes “employment income” for the maintenance calculation under the judgment.
As Eisland confirmed, the financial advisor is “paid to transfer his book of business to another FA”
25 and that the process entails “a financial advisor [being] paid money, transition[ing] his book of
business to UBS, and then leav[ing] it there[.]” This is reflected in the trial court’s finding that
respondent sold his book of business pursuant to the ALFA Program.
¶ 78 Petitioner also sets forth numerous arguments parsing the words of the Act and the
judgment to support her position that the ALFA payments constitute “employment income.” These
arguments, again, misconstrue the issue on appeal; determining the nature of the ALFA payments
does not require any statutory construction or interpretation of the judgment to decide the factual
question of whether the ALFA payments represent the purchase price for respondent’s book of
business.
¶ 79 Petitioner’s brief otherwise largely ignores the documentary and testimonial evidence
elicited at the declaratory judgment hearing. Despite the extensive documentary evidence
presented by both parties, she fails to meaningfully address any documents other than the judgment
and the Agreements. The crux of her argument is essentially that all evidence aside from the
Agreements and the judgment should be ignored completely, and she does not offer an alternative
analysis in the event we do not accept her theory. Nor does petitioner adequately address Eisland’s
testimony as one of the creators of the ALFA Program, which the trial court relied upon in
rendering its decision. Indeed, petitioner has failed to make any attempt to refute or otherwise
challenge the trial court’s reliance on the overwhelming evidence that the ALFA Program
effectuates the sale of respondent’s book of business. Certainly, petitioner does not develop any
argument that the trial court assigned improper weight to or misunderstood the evidence, credited
any witnesses improperly, or that the decision was unreasonable or unsupported by the evidence.
See Judgment Services Corp., 321 Ill. App. 3d at 154.
26 ¶ 80 To the contrary, the record demonstrates a thoughtful and detailed ruling, specifically
addressing the credibility of the witnesses, the documents received, and the weight assigned to
certain conflicting evidence. See supra ¶¶ 54-62. Petitioner has not argued that the trial court’s
assessment of this evidence was erroneous, but rather that it should not have been considered in
the first place. Having determined that the evidence was properly considered, we cannot say that
the trial court’s conclusion that the ALFA payments were for respondent’s sale of his book of
business was against the manifest weight of the evidence. 3
¶ 81 D. Equitable Defenses
¶ 82 Finally, petitioner asserts multiple equitable defenses—judicial estoppel, law-of-the-case
doctrine, collateral estoppel, and res judicata—to argue that respondent cannot be awarded the
relief he seeks in his motion for declaratory judgment. Respondent contends that petitioner did not
develop her arguments as to the latter three and, therefore, forfeited the same. We agree that
petitioner failed to develop her arguments as to the law-of-the-case doctrine, collateral estoppel,
and res judicata beyond merely defining the doctrines. As such, these arguments are forfeited.
Bartlow v. Costigan, 2014 IL 115152, ¶ 52 (holding that issues raised in a cursory fashion are
forfeited).
3 To the extent our book of business determination is dispositive, we need not address petitioner’s arguments
that the trial court’s goodwill and double dipping analyses were in error. Because we do not reach the issue of double
dipping, it is also unnecessary to address petitioner’s argument likening the speculative nature of the ALFA payments
to contingent fee contracts. See In re Marriage of Zells, 143 Ill. 2d 251, 252-53 (1991) (holding that an attorney’s
receipt of contingent fees should not be considered a marital asset and, instead, the appropriate context for their
consideration “is in the determination of income for *** maintenance.”).
27 ¶ 83 Petitioner relies upon respondent’s trial testimony regarding the ALFA Program to support
her assertion of judicial estoppel. A party asserting judicial estoppel must show that the party to
be estopped “(1) [took] two positions, (2) that are factually inconsistent, (3) in separate judicial or
quasi-judicial administrative proceedings, (4) intending for the trier of fact to accept the truth of
the facts alleged, and (5) have succeeded in the first proceeding and received some benefit from
it.” Seymour v. Collins, 2015 IL 118432, ¶ 37. Here, respondent did not take factually inconsistent
positions, and the defense fails under the first and second elements. Respondent did not deny the
existence of ALFA or his eligibility to participate in the same. He merely gave his subjective
opinion as to the quality of the program, and the pre-decree trial court otherwise received an
objective overview as to what the ALFA Program entails from both Christensen and the 2016
financial advisor compensation plan. As observed by petitioner’s expert, respondent’s opinion of
the ALFA Program is not determinative of whether it provides income for maintenance purposes.
¶ 84 III. CONCLUSION
¶ 85 For the reasons stated herein, we affirm the judgment of the circuit court of Du Page
County.
¶ 86 Affirmed.