FIRST DIVISION November 24, 2008
No. 1-07-0619
In re THE MARRIAGE OF ) Appeal from the ) Circuit Court of ANA L. WINTER, ) Cook County. ) Petitioner-Appellee, ) ) and ) No. 98 D 11073 ) JEROME WINTER, ) ) Respondent-Appellant ) The Honorable ) Mark Lopez, (Public School Teachers' Pension and ) Judge Presiding. Retirement Fund of Chicago, ) Intervenor). )
JUSTICE GARCIA delivered the opinion of the court.
In 2005, a judgment of dissolution of marriage was entered
providing for the division of the marital portion of the
respondent's pension from the Public School Teachers' Pension &
Retirement Fund of Chicago. However, the respondent, a resident
of England, failed to direct the Pension Fund to pay the
petitioner her share of the marital portion of the pension. In
2006, the petitioner filed a petition seeking a "freeze" on the
respondent's pension payments until she was paid her share in
accordance with the dissolution judgment. The circuit court
entered injunctive relief against the Pension Fund. No. 1-07-0619
In this interlocutory appeal, we must now answer whether the
circuit court had authority to enter an order against the public
pension fund directing that the member's benefits be paid to a
third-party trustee, without a qualified Illinois domestic
relations order (QILDRO). As a preliminary question, we must
answer whether the trustee and pension fund, both nonparties,
were entitled to prior notice and the opportunity to be heard
before the petitioner could be granted relief.
We hold that under the unusual facts of this case, the
trustee and the pension fund were not entitled to prior notice
and an opportunity to be heard before preliminary injunctive
relief was granted. Because the record supports the circuit
court's determination that no other effective relief was
available, we conclude the circuit court properly exercised its
broad equity powers to order the pension fund to issue the
pension checks in care of the trustee. We find no authority,
however, to support that portion of the circuit court's order
directing that the checks be made payable to the trustee.
Accordingly, we affirm in part, vacate in part, and remand with
instructions.
BACKGROUND
The petitioner, Ana L. Winter, and the respondent, Jerome
Winter, were married in 1980 and separated in 1998. On February
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25, 2005, the circuit court entered a judgment dissolving the
parties' marriage. No appeal was taken.
The dissolution judgment reflects the trial court's
difficulty in dividing the marital assets. The majority of the
documentation that would have aided the court in identifying and
valuing the assets was with Mr. Winter in England, where he
"fled" with the parties' child. Mr. Winter had been "wholly
responsible for the parties' financial matters during the
marriage."
Mr. Winter was represented by counsel in the dissolution
action, but never personally appeared in court, presented
testimony or gave a deposition. The trial court entered various
orders directing Mr. Winter to provide specific documentation
regarding the marital assets. The trial court rejected the
majority of Mr. Winter's responses as self-serving and
irrelevant.
The trial court divided those marital assets it could
identify, including Mr. Winter's pension with the Public
Teacher's Pension and Retirement Fund of Chicago (Pension Fund).
The judgment provides,
"17. ANA is further awarded the marital
portion of JEROME's pension with the [Pension
Fund]. ANA's marital portion shall be
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divided by a qualified domestic relations
order.1 JEROME shall obtain the necessary
documents from the Pension Administrator in
order to enter the qualified domestic
relations order."
The trial court reserved jurisdiction for all postjudgment
proceedings.
On February 21, 2006, Ms. Winter filed a "Petition to Freeze
Pension Funds." Ms. Winter alleged Mr. Winter was receiving
pension funds but she was not because Mr. Winter had failed to
submit the necessary documents for the entry of the QDRO in
violation of the dissolution judgment. Ms. Winter requested the
court freeze Mr. Winter's pension "until the required documents
are executed for Ms. Winter to receive her fair share," "until
further order of court," or "until the Court determines the
1 Because the pension fund involved is a public fund, the
judgment incorrectly identified the order as a "qualified
domestic relations order" (QDRO). See In re Marriage of Carlson,
269 Ill. App. 3d 464, 466-67, 646 N.E.2d 321 (1995) (explaining a
QDRO is "a creature" of the federal Employee Retirement Income
Security Act of 1974 (ERISA) (29 U.S.C. §1001 et seq. (1988)) and
does not apply to public pension plans).
4 No. 1-07-0619
extent that Jerome's share should be paid to Ana."
In August 2006, Mr. Winter filed his "Response to Petition
to Freeze Pension Funds." In his response, Mr. Winter admitted
he was receiving payments from the Pension Fund and that Ms.
Winter was not. Mr. Winter argued that a "freeze" would diminish
or impair his pension, which is protected against such actions by
the Illinois Constitution and Pension Code (40 ILCS 5/1-101 et
seq. (West 2006)). Mr. Winter argued that the Constitution and
Pension Code deprived the trial court of authority to enjoin the
Pension Fund, a nonparty. Finally, Mr. Winter argued the
dissolution judgment was unenforceable as his pension is not
subject to a QDRO.
On February 2, 2007, in an eight-page ruling, which forms
the basis of this appeal, the trial court amended the dissolution
judgment to reflect a QILDRO, applicable to public pensions,
while retaining Mr. Winter's judgment obligation to obtain the
necessary documents from the Pension Fund for the entry of such
an order. The court recognized that because Mr. Winter's
membership in the Pension Fund predated the enactment of section
1-119 of the Pension Code (40 ILCS 5/1-119 (West 2006)), which
provides for QILDROs, Mr. Winter's consent was required before a
QILDRO could be entered. See In re Marriage of Menken, 334 Ill.
App. 3d 531, 778 N.E.2d 281 (2002).
5 No. 1-07-0619
The trial court also discussed the "triangular approach"
used to ensure a former spouse's receipt of a portion of pension
benefits as marital property to which the former spouse is
entitled. See, e.g., In re Marriage of Roehn, 216 Ill. App. 3d
891, 895, 576 N.E.2d 560 (1991). Under this approach, the
payment of pension benefits from the fund to the member is
unaffected; the focus is on the member's obligation to pay the
former spouse her share of the pension benefits directly in
accordance with the dissolution judgment. Compliance is
compelled through the court's contempt powers. The trial court
concluded the triangular approach as it was approved in Roehn was
unworkable because Mr. Winter was a permanent resident of
England, having never personally participated in the litigation.
The court lacked "any hope that Jerome will ever set foot in the
State of Illinois again."
Because the entry of a QILDRO was not possible without Mr.
Winter's consent and the court's contempt powers could not reach
Mr. Winter in England, the trial court concluded "Ana ha[d] no
adequate remedy at law" and "the entry of injunctive relief" was
appropriate. The court's order provides,
"11. Accordingly, given the constraints
under which this Court is required to comply
both by statute and case law in providing
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relief to Ana in obtaining the marital
portion of Jerome's pension[,] [t]he Court
finds that injunctive relief be ordered
against the 'Pension Fund' from issuing any
future pension benefits payments directly to
Jerome. Additionally, this Court orders the
'Pension Fund' to send all future payments of
Jerome's pension benefits to Richard H.
Marcus, as attorney and trustee for Jerome,
until further order of this Court.
12. Attorney Marcus shall then deposit
all sums received from the 'Pension Fund'
directly to his 'IOLTA' account pending
further order of this court."
In a later portion, the court orders:
"1. [The Pension Fund] is enjoined from
issuing any further pension benefits to
Jerome Winter until further order of this
Court.
2. That Jerome is enjoined from
transferring, encumbering, or receiving any
lump sum payments or otherwise modifying his
pension benefits from the [Pension Fund]
7 No. 1-07-0619
without leave of this Court.
3. The [Pension Fund] shall issue all
of Jerome's future pension benefit payments
payable to Richard H. Marcus as attorney and
trustee for Jerome Winter." (Emphasis
added.)
After Mr. Winter timely filed a notice of appeal, the
Pension Fund filed a motion to intervene in the trial court. The
trial court dismissed the motion for lack of jurisdiction. After
briefs were filed here, we granted the Pension Fund's motion to
intervene.
ANALYSIS
I. Sufficiency of the Record
We first address Ms. Winter's contention that the record
before us is insufficient to decide the merits of the appeal and
therefore the appeal must be dismissed. Ms. Winter argues the
absence of a transcript or bystander's report of the trial court
proceedings below means we must presume the trial court's ruling
was correct, citing Foutch v. O'Bryant, 99 Ill. 2d 389, 459
N.E.2d 958 (1984), as authority.
We disagree. In Foutch, the supreme court addressed whether
there is a "sufficiently complete record of the proceedings at
trial to support a claim of error." (Emphasis added.) Foutch, 99
8 No. 1-07-0619
Ill. 2d at 391-92. The sufficiency of the record to address a
claim of error turns on the question presented on appeal. In
Foutch, the question was whether the trial court abused its
discretion in denying the motion to vacate an ex parte judgment.
Foutch, 99 Ill. 2d at 391-92. Absent a transcript of the hearing
below where evidence was heard, review for an abuse of discretion
of the trial court's denial of the motion, where no specific
grounds for the denial were given, was foreclosed. Foutch, 99
Ill. 2d at 392.
In this case, the trial court's written order sets forth its
reasoning. Further, because we determine the central issue--
whether the circuit court has authority to order the Pension Fund
to send payments to a trustee--presents a question of law, our
review is de novo. In re Marriage of Best, 228 Ill. 2d 107, 116,
886 N.E.2d 939 (2008) (questions of law are reviewed de novo).
The record here is sufficiently complete to address the merits of
the appeal; Foutch is not controlling.
II. Injunctive Relief Against Nonparties
A. Preliminary Injunction
Mr. Winter contends the relief granted was "defective as a
matter of law" because it is not clear whether it is in the
nature of "a temporary restraining order, preliminary injunction
or permanent injunction." Ms. Winter asserts it is a permanent
9 No. 1-07-0619
injunction.
An injunction is an equitable remedy that requires the
person " 'to whom it is directed to do or refrain from doing a
particular thing.' " In re A Minor, 127 Ill. 2d 247, 261, 537
N.E.2d 292 (1989), quoting Black's Law Dictionary 705 (5th ed.
1983). The trial court's order prohibited the Pension Fund from
paying benefits to Mr. Winter and mandated that the Pension Fund
send Mr. Winter's pension benefits to attorney Marcus, payable to
Mr. Marcus as trustee of Mr. Winter. The order imposed a
constructive trust over the pension benefits.
The order makes clear that the injunction is not permanent
in nature. "A permanent injunction is of unlimited duration and
'alters the status quo,' meaning that it adjudicates rights
between the interested parties." Skolnick v. Altheimer & Gray,
191 Ill. 2d 214, 222, 730 N.E.2d 4 (2000), citing Smith v.
Goldstick, 110 Ill. App. 3d 431, 438, 442 N.E.2d 551 (1982). As
Mr. Winter asserts, the order does not provide a final resolution
of the claims at issue; at some point the collected funds must be
disbursed. We agree. The injunctive relief granted is
preliminary in nature, subject to further proceedings before the
trial court as provided in the order. This is consistent with
the appeal arising under Supreme Court Rule 307(a)(1) (188 Ill.
2d R. 307(a)(1)), which provides for review of interlocutory
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injunctions. See Skolnick, 191 Ill. 2d at 222 (permanent
injunctions not appealable under Rule 307).
A domestic relations court is authorized to enter
preliminary injunctions during dissolution proceedings in order
to preserve the status quo of the marital estate. 750 ILCS
5/501(a) (West 2006); In re Marriage of Hartney, 355 Ill. App. 3d
1088, 1089, 825 N.E.2d 759 (2005). A preliminary injunction is
proper where (1) the moving party has a clear and ascertainable
right in need of protection, (2) the moving party will suffer
irreparable harm without relief, (3) there is no adequate remedy
at law, and (4) there is a substantial likelihood the moving
party will succeed on the merits of the case. Hartney, 355 Ill.
App. 3d at 1089.
Mr. Winter argues the court's order is an improper
preliminary injunction because (1) it alters the status quo, and
(2) it does not provide for a hearing and final disposition on
the merits.
In Illinois, " '[t]he status quo to be preserved by a
preliminary injunction is the last, actual, peaceable,
uncontested status which preceded the pending controversy.' " In
re Marriage of Petersen, 319 Ill. App. 3d 325, 336, 774 N.E.2d
877 (2001), quoting Postma v. Jack Brown Buick, Inc., 157 Ill. 2d
391, 397, 626 N.E.2d 199 (1993).
11 No. 1-07-0619
Setting aside the highly contested proceedings that preceded
the entry of the judgment of dissolution of marriage, without an
appeal following the entry of the judgment, the rights of the
parties embodied in the judgment are uncontested. Mr. Winter's
pension benefits earned during the course of the marriage are
marital property.
Mr. Winter is entitled to his pension benefits no more so
than Ms. Winter is entitled to her share of Mr. Winter's pension
benefits awarded to her as marital property. But as Mr. Winter
conceded in his response to the petition to freeze, he was
receiving pension benefits, Ms. Winter was not. It is the
"status quo" at the time of the entry of the dissolution of
marriage that the circuit court's order sought to maintain by its
February 2007 order. See Petersen, 319 Ill. App. 3d at 337
(status quo to be maintained is "the prevention of dissipation or
destruction" of marital property). By enjoining the Pension Fund
from paying Mr. Winter benefits, a portion of which he is not
entitled to, and ordering the benefits be kept in trust until the
benefits can be apportioned between the co-owners, the court
prevented Mr. Winter from dissipating assets previously
adjudicated to be marital property. In accordance with the
judgment of dissolution of marriage, a portion of Mr. Winter's
pension benefits as marital property is now separately owned by
12 No. 1-07-0619
Mr. Winter and Ms. Winter. The manner of dividing that
separately owned property remains to be resolved.
Accordingly, we reject Mr. Winter's argument that the
court's order fails because it grants an injunction "for an
indefinite period of time without providing a mechanism for a
hearing and final disposition." The trial court ordered attorney
Marcus to act as a trustee "pending further order." Further
proceedings are intended and, but for this interlocutory appeal
by Mr. Winter, might well have concluded.
B. Relief Against Nonparties
Mr. Winter contends the trial court lacked authority to
issue injunctive relief against attorney Marcus and the Pension
Fund because both are nonparties to the litigation. Ms. Winter
questions Mr. Winter's standing to assert the interests of
attorney Marcus and the Pension Fund and points out that neither
attorney Marcus nor the Pension Fund filed a notice of appeal.
Section 11-102 of the Code of Civil Procedure prohibits the
grant of a preliminary injunction without notice of the
application to "the adverse party." 735 ILCS 5/11-102 (West
2006). In this case, there is no question that Mr. Winter is the
"adverse party" and that he was served notice of Ms. Winter's
petition to freeze his pension funds. Under section 11-102, the
issue becomes whether the Pension Fund should be deemed an
13 No. 1-07-0619
"adverse party," entitling it to notice of the application for
injunctive relief.2
Ms. Winter argues the Pension Fund cannot be an adverse
party because it cannot sue or be sued and therefore is not
entitled to notice. See In re Marriage of Krane, 288 Ill. App.
3d 608, 681 N.E.2d 609 (1997). In Krane, this court struck
provisions in a judgment of dissolution of marriage that directed
the same pension fund involved in this case to give notice to the
former spouse, a nonmember of the fund, of any change in "the
depository of *** pension payments and *** any cost of living
adjustment in the pension payments." Krane, 288 Ill. App. 3d at
618. We reasoned the fund was "not an individual or municipal
corporation, but merely an aggregation of assets; there [was] no
statutory provision for the [f]und to sue or be sued." Krane,
288 Ill. App. 3d at 618.
While the Pension Fund itself may not sue or be sued, it is
clear that the proper party here is "the Board of the Fund." 40
ILCS 5/17-147 (West 2006) ("Any legal proceedings necessary for
2 Because the Pension Fund and attorney Marcus occupy the
same position as nonparties to the litigation and attorney Marcus
did not seek to intervene, we address this issue in terms of the
Pension Fund only.
14 No. 1-07-0619
the enforcement of the provisions of this Article shall be
brought by and in the name of the Board of the Fund"). Where a
misnomer occurs, "the name of any party may be corrected at any
time, before or after judgment, on motion, upon any terms and
proof that the court requires." 735 ILCS 5/2-401(b) (West 2006).
The misnomer aside, the law is clear that an injunction may
be binding on a nonparty. " ' "To render a person amenable to an
injunction it is not necessary that they should have been a party
to the suit." ' " In re A Minor, 127 Ill. 2d at 263, quoting
O'Brien v. People ex rel. Kellogg Switchboard & Supply Co., 216
Ill. 354, 366, 75 N.E. 108 (1905), quoting J. High, Injunctions
§1444. Because the circuit court's order maintained the status
quo to the entry of the judgment of dissolution, we conclude the
lack of prior notice to the Pension Fund does not render the
court's injunctive order defective.
The real issue before us, as framed by the Pension Fund as
intervenor, is whether the circuit court's injunctive order
resulted in a "deviation from the Illinois Pension Code."
Because no party questions that this raises a question of law,
reviewed de novo, we proceed to the substantive merits of the
claims by the Pension Fund and Mr. Winter that the order is
inconsistent with the Illinois Pension Code and unsupported by
case law.
15 No. 1-07-0619
III. Equity Powers of the Court
Mr. Winter and the Pension Fund contend the trial court's
order violates the Pension Code.3 In essence, the argument is
that the Pension Code bars the disbursement of benefits to anyone
other than a member of the Pension Fund. Each contends that,
whatever equitable powers a circuit court has to enforce its
judgment, equitable powers cannot be exercised in contravention
of the Pension Code and established case law. Each faults the
order in directing the Pension Fund to issue the pension payments
made "payable to Richard H. Marcus as attorney and trustee for
Jerome Winter."
Ms. Winter, while making no claim that the circuit court's
3 The Pension Fund and Mr. Winter also frame their challenge
to the trial court's order as a violation of section 5, article
13, of the Illinois Constitution. However, each fails to assert
an argument in its respective brief distinct to the
constitutional claim, which raises a possible forfeiture of the
constitutional claim. See 210 Ill. 2d R. 341(e)(7).
Nonetheless, we conclude the protection afforded by the Pension
Code and the Illinois Constitution is identical in this case; for
streamlining reasons, we address the issue only in terms of the
Pension Code.
16 No. 1-07-0619
"payable to" language is correct, asserts there is no conflict
between the injunctive order and the provisions of the Pension
Code. She asserts the trial court's grant of injunctive relief
was proper as the only effective remedy to address the ongoing
violation of the dissolution judgment by Mr. Winter.
Based on our reading of Smithberg v. Illinois Municipal
Retirement Fund, 192 Ill. 2d 291, 735 N.E.2d 560 (2000), we agree
with Ms. Winter.
A. Co-Owners of the Public Pension
The Public School Teachers' Retirement System of Illinois is
governed by Article 17 of the Pension Code (40 ILCS 5/17-101 et
seq. (West 2006)). Like other pensions controlled by the Code,
Article 17 contains an "antialienation" provision. See Smithberg
v. Illinois Municipal Retirement Fund, 192 Ill. 2d 291, 303, 735
N.E.2d 560 (2000) (Illinois Municipal Retirement Fund statute
contains an antialienation provision "like other statutes
establishing public pension funds under the Code"). Section 17-
151 provides, in part:
"All pensions, annuities, refunds, or
death benefits granted under the provisions
of this Article *** are exempt from
attachment or garnishment process. They
shall not be seized or levied upon by virtue
17 No. 1-07-0619
of any judgment or any process or proceedings
issued out of or by any court for the payment
or satisfaction in whole or in part of any
debt, claim, damage, demand or judgment." 40
ILCS 5/17-151 (West 2006).
The purpose behind antialienation provisions is to protect
employees and their beneficiaries from creditors. In re Marriage
of Hackett, 113 Ill. 2d 286, 292, 497 N.E.2d 1152 (1986)
(discussing an antialienation provision similar to section 17-
151).
Where pension benefits are marital property, former spouses
are not considered creditors. 750 ILCS 5/503(b)(1) (West 2006).
It is well settled that the spouse of a member of a pension fund
obtains an ownership interest in the benefits as marital
property, which in the course of a dissolution of marriage may be
allocated between spouses without regard to membership in the
pension fund. Hackett, 113 Ill. 2d at 292; In re Marriage of
Carlson, 269 Ill. App. 3d 464, 646 N.E.2d 321 (1995); In re
Marriage of Papeck, 95 Ill. App. 3d 624, 629, 420 N.E.2d 528
(1981). It is the former spouse's status as a co-owner of the
pension benefits that precludes the former spouse from being
labeled a creditor. The antialienation provisions of the Pension
Code present no bar to the former spouse being awarded a marital
18 No. 1-07-0619
share of the pension upon dissolution of marriage, even though he
or she is not a member of the pension fund involved. See, e.g.,
Krane, 288 Ill. App. 3d at 617-18.
In avoiding the antialienation provisions of the Pension
Code, Papeck makes clear that it is the former spouse's status as
a co-owner that is controlling. In Papeck, a former wife sought
to recover a "loan" to her former husband that had been deposited
in the husband's pension fund to reactivate his benefits. A
judgment dissolving the marriage was entered. Supplemental
proceedings were then initiated by the former wife to recover
"the money she paid into the fund [as] her nonmarital property."
Papeck, 95 Ill. App. 3d at 626. The trial court ruled in favor
of the ex-wife, "directing the pension fund to pay her the
money." Papeck, 95 Ill. App. 3d at 626. The appellate court
reversed, based on the funds being nonmarital property and
constituting a loan to the former husband. Based on this
uncontested characterization of the funds, the former wife was
deemed a creditor and the statutory antialienation provisions
barred her recovery of the loan funds. Papeck, 95 Ill. App. 3d
at 629. The Papeck court explained:
"We caution that our holding is not to
be construed as affecting the rights of
nonemployee spouses to receive a proportion
19 No. 1-07-0619
of their husband's pension benefits as part
of the marital property. *** The spouse of
the plan participant, upon dissolution of the
marriage, obtains an actual co-ownership
interest in the benefits as marital property.
Thus a divorced wife is not in the position
of a mere 'creditor,' and the anti-attachment
provision of the Firemen's Act does not bar
her claim to a certain proportion of the
benefits." (Emphasis in original.) Papeck,
95 Ill. App. 3d at 629.
Although Papeck expressly limited its holding to nonmarital
property, courts have continued to struggle with the manner in
which a co-owner, but a nonmember, may be paid his or her share
of the pension fund benefits. The Papeck holding has been
interpreted as barring courts from ordering public pension funds
to pay benefits directly to nonmembers. See In re Marriage of
Johnston, 206 Ill. App. 3d 262, 268, 562 N.E.2d 1004 (1990)
(Rizzi, J., specially concurring) (citing Papeck for the
proposition "provision for direct receipt of the marital property
benefits cannot be accomplished by court order in a case
involving a pension plan under the Pension Code"). In Roehn, 216
Ill. App. 3d at 894, the court cited Papeck and the Johnston
20 No. 1-07-0619
concurrence for the proposition "the established rule in Illinois
[is] that a court may not order a pension plan established under
the Code to pay benefits directly to a nonemployee divorced
spouse." According to Roehn, courts may only order pension
benefits to be paid "triangularly" from the fund to the employee
spouse to the nonemployee spouse. Roehn, 216 Ill. App. 3d at
895.
The overly broad reading of Papeck was reined in by Justice
McCuskey, then of the Third District, in Carlson, 269 Ill. App.
3d at 470. In Carlson, the trial court entered an order in which
the pension fund agreed to pay the nonemployee spouse directly.
The trial court denied the fund's attempt to vacate the order on
the grounds it was prohibited by a statutory antialienation
provision. In affirming, Justice McCuskey noted the Roehn court
failed to recognize Papeck's "crucial distinction" between a
creditor and a co-owner and "failed to include in its analysis
[the antialienation provision] or its meaning as explained by
[Hackett]." Carlson, 269 Ill. App. 3d at 470. The Carlson court
concluded "nothing in [the antialienation provision] or prior
case law precludes a pension fund established under article 4 of
the Pension Code from agreeing to make direct pension benefit
disbursements to a nonemployee divorced spouse." Carlson, 269
Ill. App. 3d at 471.
21 No. 1-07-0619
In Smithberg, the supreme court noted the conflict between
cases like Roehn, which construed antialienation provisions to
preclude courts from ordering direct payments from a
"nonlitigant, public pension fund" to the nonemployee spouse,
"regardless of the circumstances," and cases like Carlson, which
"considered such holdings erroneous interpretations, and
unwarranted extensions, of statements made in Papeck in an
entirely different context." Smithberg, 192 Ill. 2d at 304-05.
While the court did not "criticize or condemn" applying broadly
the antialienation provisions, the supreme court did agree with
Carlson's holding that "no statute or precedent prohibited a
public pension fund from agreeing" to pay a nonemployee spouse
directly. Smithberg, 192 Ill. 2d at 305-06. The court observed
that "the results reached by the courts in those varied
scenarios" reflected the uncertainty of the law at the time.
Smithberg, 192 Ill. 2d at 305. Based on the supreme court's
decision in Smithberg and our discussion below, we find the law
on the interplay between public pension funds and the division of
pension benefits as marital property under the Illinois Marriage
and Dissolution of Marriage Act (750 ILCS 5/101 et seq. (West
2006)) is no longer uncertain.
B. The QILDRO Statute
Effective July 1, 1999, the legislature amended certain
22 No. 1-07-0619
provisions of the Pension Code and the Illinois Marriage and
Dissolution of Marriage Act to provide for QILDROs.4 The QILDRO
statute "purports to give domestic relations courts limited
powers to effect distributions of public pension benefits through
QILDROs directed to nonlitigant pension funds." (Emphasis in
original.) Smithberg, 192 Ill. 2d at 301. Before its enactment,
"no specific statutory authority in Illinois authorized a
domestic relations court order directing payment of a
governmental pension benefit to a person other than the regular
payee." Smithberg, 192 Ill. 2d at 301. However, because neither
party in Smithberg contended the QILDRO statute controlled, the
court declined to "comment further on the wisdom or effect of
this new legislation." Smithberg, 192 Ill. 2d at 302.
To avoid "a potential violation" of section 5 of article 13
of the Illinois Constitution, the QILDRO statute requires pre-
July, 1, 1999, members to consent. C. Fain, Qualified Illinois
Domestic Relations Orders: A Retirement System View, 88 Ill. B.J.
533 (2000). Section 1-119(m)(1) of the Pension Code provides "a
QILDRO issued against a member of a retirement system established
under an Article of this Code that exempts the payment of
4 The QILDRO legislation underwent significant amendment in
1996, the substance of which is not relevant to this appeal.
23 No. 1-07-0619
benefits or refunds from attachment, garnishment, judgment or
other legal process shall not be effective without the written
consent of the member if the member began participating in the
retirement system on or before the effective date of this Section
[July 1, 1999]." 40 ILCS 5/1-119(m)(1) (West 2006). This is
because the "contractual relationship" established under the
constitution "is governed by the terms of the Code at the time
the employee becomes a member of the pension system." Menken,
334 Ill. App. 3d at 534.
In Menken, decided two years after Smithberg, the Second
District held a domestic relations court could not order the
employee spouse to consent to the QILDRO. The court reasoned the
purpose of the consent requirement was to protect the pensioner's
constitutional rights, and if a trial court could order the
participant to consent, the requirement "would be rendered
meaningless." Menken, 334 Ill. App. 3d at 535. The Menken court
also criticized the trial court for conditioning the payment of
the wife's attorney fees on whether the husband consented. The
court concluded that strategy amounted to "an improper attempt to
coerce [the husband] and bypass section 1-119(m)(1)." Menken,
334 Ill. App. 3d at 535.
1. Payable to Attorney Marcus
In this case, the trial court enjoined the Pension Fund from
24 No. 1-07-0619
issuing the pension benefits to Mr. Winter and directed it to
"issue all of Jerome's future pension benefit payments payable to
Richard H. Marcus as attorney and trustee for Jerome Winter."
While Carlson provides a pension fund may agree to alter the name
of the payee, Roehn holds a court cannot do so--at least not
without a QILDRO. As discussed above, Roehn's holding is likely
based on an erroneous reading of Papeck. Nonetheless, because
this case comes before us on an interlocutory appeal, with
further proceedings intended regarding the apportionment of the
pension benefits in the constructive trust, we find it
unnecessary to question the "established rule" that a trial court
may not order the Pension Fund to alter the named payee without a
QILDRO as held by Roehn or some other type of agreement as was
present in Carlson. We conclude it was unnecessary to preserve
the status quo and to prevent dissipation of Ms. Winter's
property for the circuit court to order the pension benefits be
made payable to attorney Marcus. Consequently, we conclude more
was required to change the name of the payee than is present in
this case and, therefore, we vacate that portion of the trial
court's order mandating the benefits be made payable to attorney
Marcus, as trustee. See Menken, 334 Ill. App. 3d at 535.
2. Triangular Approach
At oral argument, Ms. Winter's attorney contended the trial
25 No. 1-07-0619
court's order in this case represents a subspecies of Roehn's
triangular approach. Given the posture of this case, however,
the "triangle" as it now stands has only two sides. The
proceedings intended to take place before the circuit court may
well supply the missing side to this claimed variation of the
triangular approach. We conclude, however, that reliance on a
claimed variation of the triangular approach to provide payment
of Ms. Winter's share of Mr. Winter's pension benefits is
unnecessary under the facts of this case.
C. Smithberg and Equitable Remedies
There is no question but that our approval of the equitable
relief granted in this case requires that we read Smithberg
beyond its express holding. We conclude, however, the path we
follow here is precisely the path set out by our supreme court in
Smithberg. "Irrespective of empowering statutes, a court retains
its traditional equitable powers." Smithberg, 192 Ill. 2d at
298.
The ultimate issue in Smithberg was whether the pension fund
member's first or second wife was entitled to pension death
benefits. The marital settlement agreement incorporated in the
judgment of dissolution of marriage between the first wife and
the member decedent required the first wife be named beneficiary.
In fact, the member decedent named his second wife as the
26 No. 1-07-0619
beneficiary on the pension fund designation form. The first wife
argued the dissolution judgment entitled her to the benefit. The
second wife argued the statutory provision defining the
beneficiary as the person designated on the form should be
strictly construed "without regard to the attendant
circumstances." Smithberg, 192 Ill. 2d at 297. While the trial
court ruled in favor of the second wife, the appellate court
"reversed and remanded with directions that summary judgment be
entered in favor of the [first wife, pursuant to the dissolution
judgment.]" Smithberg, 192 Ill. 2d at 292. The supreme court
held the appellate court properly invoked equitable principles to
enforce the marital settlement agreement, which was approved by
the court and incorporated in the judgment of dissolution.
Smithberg, 192 Ill. 2d at 295.
As in Smithberg, we are confronted with "a challenge to the
power of a court in this context to enforce by equitable means a
judgment *** effecting [a final] distribution of marital assets."
Smithberg, 192 Ill. 2d at 295. While there is no agreed marital
settlement agreement incorporated in the judgment of dissolution
entered in this case, the disbursement of marital assets set out
in the judgment was approved by the circuit court and rendered
final in the absence of an appeal.
In Smithberg, the supreme court observed, a court's equity
27 No. 1-07-0619
powers, founded on " 'fairness, justness and right dealing' "
(Smithberg, 192 Ill. 2d at 297, quoting Black's Law Dictionary
540 (6th ed. 1990)) in human intercourse, "serve as a beacon to
any court charting a course through conflicting case authorities"
(Smithberg, 192 Ill. 2d at 297). The court explained:
"It is an elementary principle of law
that a court is vested with the inherent
power to enforce its orders. [Citation.]
Where a domestic relations order has been
entered, the trial court retains jurisdiction
to enforce its order [citation], as further
performance by the parties is often
contemplated [citation]. In the case of the
court that rendered James and [his first
wife's] judgment of dissolution, jurisdiction
was expressly retained for the purpose of
enforcing all of its terms and conditions.
Had James lived, there is no doubt that he
could have been compelled by the use of
contempt proceedings to abide by the terms of
his marital settlement agreement as
incorporated in the court's judgment. His
death, however, does not leave the courts
28 No. 1-07-0619
powerless to rectify his wrongdoing and
enforce [his first wife's] right to the death
benefit.
Irrespective of empowering statutes, a
court retains its traditional equitable
powers. Such inherent equitable power,
derived from the historic power of equity
courts, cannot be taken away or abridged by
the legislature. [Citations.] When the
legislature encroaches upon a fundamentally
judicial prerogative, this court has not
hesitated to protect judicial authority."
Smithberg, 192 Ill. 2d at 297-98.
The court also noted the particular importance of the
domestic relations courts' equity powers in cases involving
pensions.
"To be sure, in many cases pension
benefits may constitute one of the most
important items of property acquired in a
marriage of long duration; in some perhaps,
it may be the only asset of any significant
value. To deprive a domestic relations court
of the power to apportion the value of such a
29 No. 1-07-0619
significant marital asset, and enforce that
apportionment, would, in many cases, deprive
the court of the ability to do justice
between the parties. A court's authority to
enforce its judgment, equitably apportioning
marital assets, surely cannot be subordinate
to the whims of one of the parties in the
divorce proceeding or defeated by his or her
blatant violation of the parties' agreement
as incorporated in a judgment of dissolution.
As we have demonstrated, courts are not
powerless to enforce their judgments."
Smithberg, 192 Ill. 2d at 304.
We find dispositive here the particular importance of a
domestic relations court in doing justice between the parties
regarding pension benefits. As in Smithberg, the QILDRO statute
plays no role because Mr. Winter's consent was required and he
refused to consent. (We note, Ms. Winter did not challenge
Menken's holding that a court may not compel consent under the
QILDRO statute.) Nonetheless, the circuit court below was not
"powerless to rectify [Mr. Winter's] wrongdoing" where Mr. Winter
was receiving both his and Ms. Winter's share of the pension
benefits. While the circuit court's contempt powers were clearly
30 No. 1-07-0619
ineffective against Mr. Winter because he is a permanent resident
of England, much as those powers were useless to reach beyond the
grave in Smithberg, the circuit court was well within its
"historic power" of equity to begin to fashion a remedy to Mr.
Winter's ongoing violations of his obligations under the judgment
of dissolution of marriage entered in this case.
Like the appellate court's resolution affirmed by the
supreme court in Smithberg, the trial court in this case properly
invoked its equity powers to preserve Ms. Winter's share of the
property she co-owned with Mr. Winter. To accomplish this aim,
the circuit court properly enjoined the Pension Fund from giving
Mr. Winter absolute control over the pension benefits, at least
until the fair and just apportionment of the co-owned property
could be made.
In the face of ongoing wrongdoing by Mr. Winter in retaining
control over more than the share of the pension benefits to which
he was entitled, the circuit court acted properly in establishing
a constructive trust over the pension benefits until justice
could be done between Ms. Winter and Mr. Winter. See, e.g.,
Suttles v. Vogel, 126 Ill. 2d 186, 193, 533 N.E.2d 901 (1988),
quoting Perry v. Wyeth, 25 Ill. 2d 250, 253, 184 N.E.2d 861
(1962) (" 'A constructive trust is one raised by operation of law
as distinguished from a trust created by express agreement
31 No. 1-07-0619
between the settlor and the trustee' "). While ordinarily the
party in possession of the wrongfully acquired property would be
declared a trustee, the circuit court correctly named attorney
Marcus as trustee of the constructive trust because there was
little likelihood that Mr. Winter, had he been named trustee,
could have been forced "to transfer title and possession of the
wrongfully acquired property to the beneficiary." Smithberg, 192
Ill. 2d at 299, citing Suttles, 126 Ill. 2d at 193. The creation
of a constructive trust and the naming of attorney Marcus as
trustee, were proper remedies to address Mr. Winter's "blatant
violation" of the dissolution judgment that would have otherwise
continued. Smithberg, 192 Ill. 2d at 304.
Because neither the QILDRO statute nor the court's contempt
power provided the means of enforcing the dissolution judgment,
the circuit court properly exercised its historic power of equity
in fashioning a means of doing justice between the parties.
"[E]quity will regard as done that which ought to be done."
Smithberg, 192 Ill. 2d at 297.
D. Deviation From the Pension Code
We address briefly the remaining arguments by Mr. Winter and
the Pension Fund that the preliminary injunction order deviated
from the Pension Code and case law.
We find no factual support for Mr. Winter's contention that
32 No. 1-07-0619
his pension benefits have been "impaired or diminished"; the
total amount of his pension is unaffected. Mr. Winter's full
pension payments are being sent to attorney Marcus as a trustee,
who must remain in possession of the funds until further order of
court. While the order certainly curtails Mr. Winter's access to
his pension, it is a temporary curtailment until his wrongful
receipt of Ms. Winter's share of his pension payments can be
addressed in further proceedings below. If Mr. Winter wants
immediate access to that portion of the pension payments that is
his, he knows full well how that may be accomplished.
To be clear, in upholding the injunctive relief against the
Pension Fund, we conclude the circuit court's order does not
conflict with Illinois case law. Quite the opposite, we find the
decisions in Smithberg and Carlson to be consistent with the
circuit court's decision below. The Carlson court concluded:
"[N]othing in our State's statutes or case law prohibits a
pension fund established under article 4 of the Pension Code from
agreeing to disburse pension benefits directly to a nonemployee
divorced spouse when that spouse has become entitled to such
benefits." Carlson, 269 Ill. App. 3d at 472. The implication is
clear: if a pension fund may agree to disburse pension benefits
directly to a nonemployee co-owner, we see nothing in our State's
statutes or case law to preclude a circuit court from ordering a
33 No. 1-07-0619
Pension Fund to do that which the Pension Fund could have agreed
to do on its own. No public policy was violated by the agreement
in Carlson; we are unpersuaded that a deviation from the Pension
Code or case law occurred here.
The circuit court below exercised its equitable power to
correct an ongoing wrongdoing by Mr. Winter, much as in
Smithberg. The supreme court recognized in Smithberg the
fundamental judicial prerogative to do justice between the
parties. Mr. Winter was not free to turn the protection afforded
by section 17-151 of the Pension Code as a shield against
creditors into a sword to keep Ms. Winter at bay from that
portion of Mr. Winter's pension payments to which she is entitled
under the judgment of dissolution of marriage. Under the
attendant circumstances, section 17-151 is no barrier to entry of
the circuit court's order in this case, allowing for
apportionment of the pension benefits in further proceedings.
Mr. Winter and the Pension Fund argue the court's order is
akin to the sort of order found improper in Menken because it
seeks to coerce Mr. Winter into consenting to a QILDRO. Mr.
Winter argues "no real solution is contemplated by the court's
order, and that its sole raison d'etre is merely to cause Mr.
Winter sufficient hardship by the withholding of his benefits
that he will feel compelled to sign the consent." The Pension
34 No. 1-07-0619
Fund argues the trial court either "intends that the withholding
of the benefits *** will cause [Mr. Winter] sufficient hardship
that he will sign the consent, or it may be contemplating
entering a future order compelling the Trustee to turn the
benefits over."
The outcomes envisioned by Mr. Winter and the Pension Fund,
though causing each concern, may yet be addressed in further
proceedings before the circuit court. Even Mr. Winter recognizes
that at some point the collected funds must be disbursed.
Certainly, the marriage dissolution judgment contemplated an
apportionment of the marital property pension benefits between
Mr. Winter and Ms. Winter. We leave it to the circuit court to
determine whether doing justice between the parties requires "a
future order compelling the Trustee to turn the benefits over."
Neither Mr. Winter's nor the Pension Fund's arguments
persuade us that the trial court's order was erroneous as overly
coercive. In the face of continuing wrongdoing, a court's order
stopping the wrongdoing will always be seen as coercive from the
perspective of the wrongdoer. Here, the circuit court's order
was simply a means of enforcing its dissolution judgment, where a
contempt proceeding was unavailable. The supreme court
recognized that compliance at times must be compelled. "Had the
cause proceeded to the circuit court, [the decedent] undoubtedly
35 No. 1-07-0619
would have faced a finding of contempt of court; he would have
been ordered to reinstate [his first wife] as the beneficiary of
his death benefit *** ." Smithberg, 192 Ill. 2d at 296. The
judicially approved triangular approach also relies on court
compelled compliance. Roehn, 216 Ill. App. 3d at 895.
Nonetheless, in this case, the end result is yet to be
determined. Unlike in Menken, the circuit court below did not
simply order Mr. Winter to consent to a QILDRO or condition a
"punishment" of sorts should he refuse. The circuit court's
injunctive order preserved Ms. Winter's share of the pension
payments, to which Mr. Winter does not and cannot deny she is
entitled, while, for the time being, casting a net that captures
Mr. Winter's share until accounts can be settled. The court's
order was a proper exercise of its broad equity powers. "Given
these facts and circumstances, the only matter remaining to be
resolved concerns the mechanics of that resolution." (Emphasis
omitted.) Smithberg, 192 Ill. 2d at 306.
CONCLUSION
For the reasons set forth above, we hold the trial court
properly invoked its equity powers to grant injunctive relief.
We uphold the court's order enjoining the Pension Fund from
issuing further payments to Mr. Winter directly, enjoining Mr.
Winter's receipt of pension payments, and ordering the Pension
36 No. 1-07-0619
Fund to send Mr. Winter's payments in care of attorney Marcus as
trustee. However, we vacate that portion of the order that
requires the Pension Fund to issue Mr. Winter's payments "payable
to" attorney Marcus. The funds received under this improper
payee designated method are to remain in the constructive trust
to be apportioned, along with future pension benefits, in
accordance with the results of further proceedings to take place
below. We remand to the circuit court for further proceedings
consistent with this opinion.
Affirmed in part and vacated in part; cause remanded.
R. GORDON, P.J., and WOLFSON, J., concur.
37 No. 1-07-0619
REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT ______________________________________________________________________________
IN RE MARRIAGE OF:
ANA WINTER, Petitioner-Appellee,
and
JEROME WINTER, Respondent-Appellant,
(PUBLIC SCHOOL TEACHERS' PENSION AND RETIREMENT FUND OF CHICAGO, Intervenor). ________________________________________________________________
Appellate Court of Illinois First District, First Division
Filed: November 24, 2008 _________________________________________________________________
R. GORDON, P.J., and WOLFSON, J., concur. _________________________________________________________________
Appeal from the Circuit Court of Cook County Honorable Mark Lopez, Judge Presiding _________________________________________________________________
For PETITIONER - James K. Leven APPELLEE 203 North LaSalle Street, Suite 2100 Chicago, Illinois 60601
For RESPONDENT - Richard H. Marcus APPELLANT Law Offices of Chicago Kent College of Law 565 West Adams Street
38 No. 1-07-0619
Chicago, IL 60661
Of Counsel: Stuart Berks, Leon E. Farbman Deutsch, Levy & Engel, Chartered 225 West Washington Street, Suite 1700 Chicago, IL 60606
INTERVENOR Anita Tanay Jacobs, Burns, Orlove, Stanton & Hernandez 122 South Michigan Avenue, Suite 1720 Chicago, IL 60603