Opinion
2-23-0352
12-23-2024
In re MARRIAGE OF JEFFREY R. HYMAN, Petitioner-Appellee, and RACHEL D. HYMAN, Respondent-Appellant.
Attorneys for Appellant: Shana L. Vitek, of Beermann LLP, of Chicago, for appellant. Attorneys for Appellee: Eric J. Schwab, of Berger Schatz LLP, of Chicago, for appellee.
Appeal from the Circuit Court of Lake County. No. 14-D-2299 Honorable Ari Fisz, Judge, Presiding.
Attorneys for Appellant: Shana L. Vitek, of Beermann LLP, of Chicago, for appellant.
Attorneys for Appellee: Eric J. Schwab, of Berger Schatz LLP, of Chicago, for appellee.
JUSTICE McLAREN delivered the judgment of the court, with opinion. Justices Schostok and Mullen concurred in the judgment and opinion.
OPINION
MCLAREN, JUSTICE
¶ 1 Respondent, Rachel D. Hyman, appeals from the trial court's orders (1) granting in part her petition for attorney fees, (2) denying her petition for fees related to her successful defense on appeal, and (3) denying her request for statutory postjudgment interest. We vacate and remand.
Prejudgment interest is not involved in this appeal.
¶ 2 I. BACKGROUND
¶ 3 The marriage of Rachel and petitioner, Jeffrey R. Hyman, was dissolved in 2015. The judgment of dissolution incorporated the parties' marital settlement agreement (MSA), which provided, in part:
"In the event there are additional marital assets discovered not otherwise set forth in this agreement, upon disclosure/discovery of an additional marital asset, said marital asset shall be divided between the parties as follows: fifty percent (50%) to Rachel and fifty percent (50%) to Jeffrey using the greater of (a) the value of the asset at the time the property is discovered or (b) value of the asset on the date of entry of a Judgment for Dissolution of Marriage."Approximately two years later, Rachel filed a "Petition for Allocation of Undisclosed Marital Asset," alleging that Jeffrey had failed to disclose as a marital asset certain stock options that arose during the marriage and seeking the equal division of that asset. The trial court granted Rachel's petition; her 50% share was calculated to be $246,597, which, after taxes and expenses, required Jeffrey to pay Rachel $130,196. Jeffrey received a stay of judgment pending appeal. On appeal, this court affirmed the trial court's judgment. See In re Marriage of Hyman, 2023 IL App (2d) 220041.
¶ 4 Back in the trial court, Rachel filed two fee petitions. In her "Amended Petition for Attorney's Fees and Costs" (Fee Petition), Rachel sought $56,755.25 pursuant to sections 508(a) and 508(b) of the Illinois Marriage and Dissolution of Marriage Act (Act) (750 ILCS 5/508(a), (b) (West 2022)), arguing that she incurred those fees as a result of Jeffery failing to disclose the asset and increasing the cost of litigation by contesting Rachel's right to half of the asset after she discovered it. In her "Petition for Attorneys' Fees and Costs Incurred for Defense of Appeal" (Appellate Fee Petition), brought pursuant to sections 508(a)(3) and 508(b) of the Act (750 ILCS § 508(a)(3), (b)), Rachel sought $24,833.91 in attorney fees and costs associated with her successful defense of Jeffrey's appeal.
¶ 5 After considering billing documents and argument on both petitions, the trial court denied the requests for fees pursuant to section 508(a) in both petitions, finding that "[i]t has not been shown that Ms. Hyman has an inability to pay." The court then denied the Appellate Fee Petition in its entirety but granted in part the Fee Petition. The court awarded $10,000 towards Rachel's section 508(b) attorney fees and costs, finding that Jeffrey's "failure to comply with the Judgment for Dissolution of Marriage was without compelling cause or justification" and that $10,000 was a "reasonable amount of attorney's fees regarding this specific circumstance." In discussing the method of payment of the fees, Rachel noted that Jeffrey's proposed order "does not include things like the mandatory interest, so I need to add that." After a very brief argument, the court stated, "I have reviewed the statute and case law on this recently [and] I'm not granting interest, only the $10,000." The court denied Rachel's subsequent motion to reconsider. This appeal followed.
¶ 6 II. ANALYSIS
¶ 7 Rachel now seeks reversal of the trial court's fee awards, contending that the trial court erred in (1) awarding only $10,000 pursuant to her Fee Petition, (2) denying in its entirety her Appellate Fee Petition, and (3) denying her request for statutory postjudgment interest.
While both of Rachel's fee petitions included requests for fees pursuant to section 508(a) of the Act, Rachel does not contest on appeal the trial court's denial of fees under that theory of recovery.
¶ 8 Rachel first argues that the trial court erred in its award of section 508(b) fees under the Fee Petition. According to Rachel, the trial court "[f]ailed to exercise its discretion by awarding her precisely $10,000 in 508(b) attorneys' fees[ ] despite finding Jeffrey's conduct lacked a compelling cause or justification."
¶ 9 Section 508(b) of the Act provides in relevant part:
"In every proceeding for the enforcement of an order or judgment when the court finds that the failure to comply with the order or judgment was without compelling cause or justification, the court shall order the party against whom the proceeding is brought to pay promptly the costs and reasonable attorney's fees of the prevailing party. *** If at any time a court finds that a hearing under this Act was precipitated or conducted for any improper purpose, the court shall allocate fees and costs of all parties for the hearing to the party or counsel found to have acted improperly. Improper purposes include, but are not limited to, harassment, unnecessary delay, or other acts needlessly increasing the cost of litigation." Id. § 508(b).Section 508(b) makes mandatory the imposition of attorney fees where the party seeking the enforcement of a court order prevails and the court finds that the other party's failure to comply was without compelling cause or justification. In re Marriage of Putzler, 2013 IL App (2d) 120551, ¶ 40. A trial court must impose fees without consideration of either party's ability to pay; the court considers only the reasonableness of the fee award. Id. In determining reasonableness, a court should consider such factors as the nature of the case, the novelty and/or difficulty of the issues involved, the importance of the matter, the standing and skill of the attorney, the degree of responsibility required, the usual and customary charges for similar work, the benefit to the client, and whether there is a reasonable connection between the fees requested and the amount involved in the litigation. In re Marriage of Kane, 2016 IL App (2d) 150774, ¶ 25. The trial court's only discretion in this regard extends to the determination of the amount of reasonable fees. In re Marriage of Sanda, 245 Ill.App.3d 314, 319 (1993). In making this determination, a trial court may rely on the pleadings, affidavits on file, and its own experiences. Id. We will not reverse a trial court's award of attorney fees absent an abuse of the court's discretion. In re Marriage of Powers, 252 Ill.App.3d 506, 508-09 (1993).
¶ 10 "When a trial court reduces the amount requested in a fee petition, the court's ruling should include the reasons justifying a particular reduction." Richardson v. Haddon, 375 Ill.App.3d 312, 315 (2007). Because the abuse of discretion standard presupposes a reasoned exercise of discretion, the lack of an explanation for a reduction of fees often is sufficient to constitute an abuse of discretion when the reasons for an unexplained decision are not apparent from the record. Advocate Health &Hospitals Corp. v. Heber, 355 Ill.App.3d 1076, 1079 (2005). When presented with such circumstances, a reviewing court remands the cause to the trial court to allow the trial court to state its reasons for its decision. Id. However, a trial court is not required to review the billing entries line-by-line and affirmatively strike those entries that it deems unreasonable, nor must the court provide a specific explanation for each reduction. Kane, 2016 IL App (2d) 150774, ¶ 29.
¶ 11 Here, the trial court found that Jeffrey's failure to comply with the court order was without compelling cause or justification, thereby making the imposition of attorney fees mandatory. However, in making the finding that the "reasonable amount of attorney's fees regarding this specific circumstance is $10,000," instead of the requested $56,755.25 (an 82% reduction), the court provided no explanation as to how it reached that figure. Only in ruling on Rachel's subsequent motion to reconsider did the court cite specific entries in the billing records that induced the court to reduce the award of fees, including: "literally dozens" of "vague entries" that "didn't really specify the subject matter" of communications; "numerous instances of more than one attorney doing the same work"; and "many instances of too much time, in the Court's judgment, being billed for certain tasks" (with several specific examples listed). Such examples of factual reasons for reducing a requested amount for fees should be provided as part of the court's original judgment, not held for release only after a motion to reconsider is filed.
¶ 12 The trial court also listed reliance "on its own knowledge and experience in determining the value of the services rendered." However, the court also enumerated a final basis for its reduction of the requested fee award:
"The Court will note that I even went so far as to speak to people who I know who are and have been attorneys in the area of family law in this general vicinity[ ] and spoke to them about their opinion as I do sometimes in situations like this. For whatever it is worth, the various opinions I had pinned down a reasonable amount of attorneys' fees between 5- and $10,000. Like I said, my own estimate was $10,000, so that is what I went with. And that is how I applied my knowledge and experience in determining the value of the services rendered."
¶ 13 This court must presume that, when a trial court sits as the trier of fact, it considers only competent admissible evidence in making its findings. See People v. Naylor, 229 Ill.2d 584, 603 (2008). However, while a trial court does not operate in a bubble, and it may take into account its own life and experience in making its rulings (see People v. Pellegrini, 2019 IL App (3d) 170827, ¶ 64), it may not make a determination based on private investigation or private knowledge, untested by cross-examination or any of the rules of evidence. See People v. Dameron, 196 Ill.2d 156, 171-72 (2001); People v. Moon, 2019 IL App (1st) 161573, ¶ 28. Here, the trial court explicitly stated that it sought out the opinions of unnamed "people who I know who are and have been attorneys in the area of family law in this general vicinity." These unnamed lawyers did not testify. Their knowledge, practical experience, opinions, and potential biases were never tested by cross-examination. The opinions of unnamed, untested acquaintances of a trial court have no place in the court's determinations, and any judgment incorporating those opinions is made in error. Thus, we must vacate the trial court's judgment as to the fee petition and remand the cause for a new hearing on the request for fees.
¶ 14 Rachel next contends that the trial court erred in denying her request for appellate fees. We first must address Jeffrey's argument that this court should deem this contention forfeited on appeal, as Rachel "failed to properly present her request for appellate fees under 508(b) at the trial court level."
¶ 15 We find Jeffrey's argument to be without merit and in bad faith. Rachel's Appellate Fee Petition specifically stated that it was brought "pursuant to 750 ILCS 5/508(a)(3) and 5/508(b)." Jeffrey's response to the Appellate Fee Petition avers, in the section entitled "INTRODUCTION AND AFFIRMATIVE MATTERS," that "Rachel requests attorney's fees and costs pursuant to Sections 508(a)(3) and 508(b) of the [Act] in connection with the appeal." (Emphasis added.) Jeffrey then specifically addressed "two bases to award attorneys' fees and costs pursuant to Section 508(b) of the [Act] -neither of which apply to this case." He later accused Rachel of "attempting to use a few select sentences from the Appellate Court's Opinion-taken out of context-to support her request for fees under Section 508(b)." (Emphasis added.). Jeffrey's forfeiture argument on appeal is repudiated by his own filings in the trial court and is not well taken.
¶ 16 Again, section 508(b) mandates the imposition of attorney fees where the party seeking the enforcement of a court order prevails and the court finds that the other party's failure to comply was without compelling cause or justification. Putzler, 2013 IL App (2d) 120551, ¶ 40. The trial court did find that Jeffrey's failure to comply with the previous order in the case was without compelling cause or justification. Yet the trial court, again without explanation, denied the Appellate Fee Petition in its entirety. In denying Rachel's motion to reconsider, the court stated, "There is no case law that the Court is aware of making the granting of 508(b) fees mandatory for attorneys' fees related to an appeal. And the Court in this circumstance does not believe it is appropriate to grant 508(b) fees as it relates to this appeal." The court distinguished the case of In re Marriage of Clay, 210 Ill.App.3d 778 (1991), a case argued by both parties:
As we noted above, "When a trial court reduces the amount requested in a fee petition, the court's ruling should include the reasons justifying a particular reduction." Richardson, 375 Ill.App.3d at 315; see supra ¶ 10. Although this was not raised as an argument on this issue we reiterate that the trial court should provide reasons for its judgment, not hold them for release only after a motion to reconsider is filed. See supra ¶ 11.
"Now, the only case law that this Court is aware of mandating 508(b) to be applied to attorneys' fees related to an appeal is the case that the parties cited and discussed which is [I]n re the [M]arriage of Clay. Now, Mr. Sabath [(Jeffrey's counsel)] is correct, that case is expressly limited to a situation where a noncustodial parent withholds child support without cause or justification, and that Court [sic] discussed the public policy reasons in support of doing what it did. And that case was very clearly limited just to that specific situation; therefore, that case is distinguishable here."
¶ 17 Jeffrey argues that Clay "held narrowly that, for public policy reasons, appellate fee awards under section 508(b) are mandatory in appeals involving the enforcement of child support orders" (emphasis in original), quoting:
"We conclude that policy requires a holding that once a noncustodial parent withholds child support without cause or justification, that party will be ordered to pay
costs and reasonable fees to the prevailing party for the services rendered both in the trial and the appellate court proceedings, regardless of who initiates the appeal." Id. at 782.Jeffrey asserts that, "if all appellate fees were mandatory under 508(b), then the Clay court would have had no need to look to public policy to support its holding in that case."
¶ 18 However, what neither Jeffrey nor, apparently, the trial court noticed was that the public policy noted by the Clay court was in reference to a predecessor version of section 508(b) (Ill. Rev. Stat. 1985, ch. 40, ¶ 508(b)) that was analyzed in a case cited in Clay, In re Marriage of Wassom, 165 Ill.App.3d 1076, 1080-81 (1988),:
" 'In every proceeding for the enforcement of an order or judgment for child support in which relief is granted to the parent having custody of the child and the court finds that the failure to pay child support was without cause or justification, the court shall order the party against whom the proceeding is brought to pay the custodial parent's costs and reasonable attorney's fees.'" (Emphases added.) (quoting Ill. Rev. Stat. 1985, ch. 40, ¶ 508(b)).The version of section 508(b) in effect at the time that Clay was decided (Ill. Rev. Stat. 1989, ch. 40, ¶ 508(b)) applied to "the enforcement of an order or judgment," not, as in Wassom, "the enforcement of an order or judgment for child support" (Ill. Rev. Stat. 1985, ch. 40, ¶ 508(b)). The public policy was not the basis for Clay's decision and did not limit its reach to child support cases. Indeed, Clay unambiguously held, "Provisions of section 508(b) are mandatory and, while allowing a determination of reasonableness, do not allow for discretion as to payment if the defaulting party's conduct was without cause or justification." (Emphases added.) Clay, 210 Ill.App.3d at 782. Nowhere does Clay even suggest that section 508(b) provisions are limited in any way. Thus, pursuant to Clay, as Jeffrey's conduct was without cause or justification, the trial court erred in failing to impose mandatory, reasonable fees pursuant to section 508(b) on Rachel's Appellate Fee Petition. The trial court's order denying the petition must be vacated, and the cause must be remanded for a determination of reasonable fees.
¶ 19 Rachel next contends that the trial court erred in denying her request for postjudgment interest pursuant to section 2-1303 of the Code of Civil Procedure (Code) (735 ILCS 5/2-1303 (West 2022)). When the trial court granted in part Rachel's Fee Petition, ordering Jeffrey to pay $10,000 in attorney fees, Rachel noted that the proposed order "does not include things like the mandatory interest, so I need to add that." The court declined to grant interest; it also denied Rachel's motion to reconsider on this point.
¶ 20 Section 2-1303 of the Code provides in relevant part:
"[J]udgments recovered in any court shall draw interest at the rate of 9% per annum from the date of the judgment until satisfied ***. When judgment is entered upon any award, report or verdict, interest shall be computed at the above rate, from the time when made or rendered to the time of entering judgment upon the same, and included in the judgment. Interest shall be computed and charged only on the unsatisfied portion of the judgment as it exists from time to time. The judgment debtor may by tender of payment of judgment, costs and interest accrued to the date of tender, stop the further accrual of interest on such judgment notwithstanding the prosecution of an appeal, or other steps to reverse, vacate or modify the judgment." (Emphasis added.) Id.
The legislature has also provided that "[e]very judgment except those arising by operation of law from child support orders shall bear interest thereon as provided in Section 2-1303." Id. § 12-109(a). Every judgment arising by operation of law from a child support order bears interest as provided in subsection 12-109(b). Id. § 12-109(b). The imposition of interest pursuant to section 2-1303 is mandatory. See Stanphill v. Ortberg, 2020 IL App (2d) 190769, ¶ 9 ("Further, the application of interest under section 2-1303 is mandatory, so a trial court has no discretion to refrain from imposing [postjudgment] interest upon a money judgment.").
¶ 21 When the trial court declined to grant Rachel interest, it stated merely that, having reviewed the statute and the case law on the subject recently, "I'm not granting interest, only the $10,000."In later denying Rachel's motion to reconsider, the trial court found that, contrary to Rachel's claim that the underlying $130,196.35 award was a money judgment in an enforcement action, the award was actually a marriage dissolution judgment. Relying on In re Marriage of Polsky, 387 Ill.App.3d 126 (2008), the court stated that "granting interest on marriage dissolution judgments is within the sound discretion of the trial court. Everyone seems to agree that that is the law." The court then stated that it found "no unique or unusual reason or circumstance in this case that the Court believes would require the Court in the eyes of justice" to grant statutory interest "in a situation like this."
We reiterate, again, that the trial court should provide reasons for its judgment. See, supra, ¶¶ 11, 16 n.3.
¶ 22 The trial court's finding that the award was actually a marriage dissolution judgment is not supported by the evidence or the law. Following the underlying $130,196 award to Rachel, Jeffrey moved for a stay of judgment pending appeal, citing Illinois Supreme Court Rule 305(a) (eff. July 1, 2017), in which subsection (a) is entitled "Stay of Enforcement of Money Judgments." Jeffrey argued that the court's order "requires Jeffrey to pay to Rachel a set amount of money" and "constitutes a money judgment for purposes of Jeffrey's Motion for Stay." The court entered an agreed order granting the motion, ordering that "[t]he Order entered February 2, 2022[,] directing Jeffrey to pay the sum of $130,196.35 to Rachel is stayed pending Appeal." The underlying judgment against Jeffrey was clearly a money judgment in the eyes of Jeffrey and the trial judge that granted the stay. It was a judgment that fixed and determined the amount of Jeffrey's debt to Rachel to a sum certain and finally determined the rights of the parties with respect to the stock options held at the time of the judgment for dissolution. The trial court cannot now change that reality.
¶ 23 Ultimately, however, the trial court's attempted distinction of the judgment as a "marriage dissolution judgment" is irrelevant. In enacting the current versions of sections 12-109(a) and 12-109(b), the legislature has provided a comprehensive, all-inclusive mandate that all judgments shall bear postjudgment interest. See 735 ILCS 5/12-109(a), (b) (West 2022). The judgment here is clearly covered by subsection (a), which requires that "[e]very judgment except those arising by operation of law from child support orders shall bear interest thereon as provided in Section 21303." (Emphasis added.) Id. § 12-109(a). Interest is not left to the discretion of the trial court when a governing statute has plainly stated otherwise. See Illinois Department of Healthcare &Family Services ex rel. Wiszowaty v. Wiszowaty, 239 Ill.2d 483, 489 (2011) ("When a statute has prescribed a plain rule, free from doubt and ambiguity, it is as well usurpation in a court of equity as in a court of law, to adjudge against it; and for a court of equity to relieve against its provisions, is the same as to repeal it." (Internal quotation marks omitted.))
¶ 24 Our determination is further supported by the statutory maxim inclusio unius est exclusio alterius (the inclusion of one thing in a statute is construed as the exclusion of all others). See In re Marriage of Holtorf, 397 Ill.App.3d 805, 810 (2010). Under this principle, "the enumeration of exceptions in a statute is construed as an exclusion of all other exceptions." People ex rel. Sherman v. Cryns, 203 Ill.2d 264, 286 (2003). Section 12-109(b) of the Code enumerates a single exception to the requirement of section 12-109(a). Section 12-109(a) states "[e]very judgment except those arising by operation of law from child support orders shall bear interest thereon as provided in Section 2-1303." (Emphasis added.) See 735 ILCS 5/12-109(a) (West 2022). The statute then addresses, in section 12-109(b), interest on judgments arising by operation of law from child support orders. Id. § 12-109(b). The specific exclusion of judgments arising by operation of law from child support orders from the general requirement of section 12-109(a) means that no other exceptions to section 12-109(a) are contemplated. The judgment here must be covered by subsection (a)'s interest requirement.
¶ 25 Jeffrey relies on the supreme court case of Finley v. Finley, 81 Ill.2d 317 (1980), and several appellate court cases, including Polsky, 387 Ill.App.3d 126, to support his position that interest here is discretionary, not mandatory. In Finley, the supreme court concluded that "the allowance of interest on past-due periodic support payments is not mandatory, as contended by the plaintiff, but lies within the sound discretion of the trial judge, whose determination will not be set aside absent an abuse of that discretion." Finley, 81 Ill.2d at 332. However, in Wiszowaty, our supreme court explained that appellate courts, such as in Polsky, had been reading Finley incorrectly:
"Finley decided, inter alia, whether a custodial parent was entitled to interest on unpaid child support. At that time, in 1980, unpaid child support payments were not characterized as judgments. Indeed, as noted above, the reason section 505(d) was added to the Marriage Act was to make clear that each unpaid support payment was to be treated as a judgment. Further, in 1980 there was no statute referencing interest on unpaid child support payments. Only a general statutory provision on interest for judgments existed.
See Ill. Rev. Stat. 1979, ch. 74, par. 3 ('Judgments recovered before any court shall draw interest at the rate of 9% per annum from the date of the judgment until satisfied').
Since periodic child support payments were not judgments that fell within the terms of the general interest statute, the question at issue was whether any basis existed for awarding interest on those payments. This court in Finley looked at the nature of the dissolution proceeding, likened it to a chancery proceeding, and found that interest on support payments lay within the discretion of the court and would be allowed if 'warranted by equitable considerations.' Finley, 81 Ill.2d at 332. In so holding, the court was relying on a principle of law that we have recently explained:
'[I]t is well settled that interest is not recoverable absent a statute or agreement providing for it. [Citation.] An exception to this rule exists in equity. In chancery proceedings, the allowance of interest lies within the sound discretion of the judge and is allowed where warranted by equitable considerations and disallowed if such an award would not comport with justice and equity.' (Internal quotation marks and emphasis omitted.) Tri-G, Inc. v. Burke, Bosselman &Weaver, 222 Ill.2d 218, 257 (2006)." Wiszowaty, 239 Ill.2d at 488-89.Thus, Finley stands for the proposition that, where there are no controlling statutes defining unpaid support payments as judgments or providing for interest, interest may be awarded on those payments as a discretionary matter because the divorce proceeding may be likened to a chancery proceeding. However, Finley does not stand for the blanket proposition that interest on judgments arising in marital dissolution proceedings is always left to the discretion of the trial court.
¶ 26 Jeffrey also argues that this court should find this claim forfeited "because Rachel failed to raise the claim in the trial court." According to Jeffrey, Rachel did not properly move for interest; she merely made "an offhand request that the trial court declined to grant." He notes that the claim was never briefed or substantively argued in the trial court and argues that, as Rachel raised the issue only after the hearing on her fee petitions had concluded, it is forfeited on appeal. We disagree.
¶ 27 The language of section 2-1303 is "positive and self-executing." In re Marriage of Passiales, 144 Ill.App.3d 629, 640 (1986). "A court is without authority to limit the accrual of interest imposed by statute." Id. "Interest upon a judgment is not part of the judgment, but an incident thereto, and arises solely by virtue of the provisions of the statute." Tracey v. Shanley, 311 Ill.App. 529, 534 (1941); see Department of Revenue v. Anderson, 131 Ill.App.3d 486, 488 (1985) (In the context of a motion to modify the judgment to include additional interest because of an amendment to the statutory rate of interest contained in the Retailers' Occupational Tax Act (Ill. Rev. Stat. 1979, ch. 120, ¶ 440 et seq.), "[i]t has been held that the fact that the complaint does not ask for interest is of no consequence since, where it is provided for by statute, it will be read into the complaint"). Rachel was not required to move for the imposition of mandatory interest; the court was required by law to impose the interest. This issue is not forfeited.
¶ 28 The trial court here had no discretion regarding the imposition of the statutorily required 9% interest. The order denying the request for interest must be vacated.
¶ 29 III. CONCLUSION
¶ 30 For these reasons, we vacate the judgments of the circuit court of Lake County granting in part Rachel's Fee Petition and denying Rachel's Appellate Fee Petition, and we remand the cause for a new hearing on each petition. Further we vacate the judgment denying the imposition of statutory interest and instruct the trial court to enforce the statutorily required 9% postjudgment interest on the February 2, 2022, award.
¶ 31 Vacated and remanded with directions.