In re Marriage of Kriegsman

Citations: 218 Ill. App. 3d 909; 578 N.E.2d 1186; 161 Ill. Dec. 540; 1991 Ill. App. LEXIS 1461Docket: Nos. 1-89-3348, 1-90-2049 cons.

Court: Appellate Court of Illinois; August 29, 1991; Illinois; State Appellate Court

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Custody of the minor child, Falcon, was awarded to Steven Kriegsman following the dissolution of marriage from Clarette Kriegsman, who fled with the child during the proceedings and remains at large. Clarette's attorneys, Pedersen, Houpt, P.C., continued to represent her in her absence and were awarded substantial attorney fees, to be paid by Clarette as their client. The firm appeals, arguing that a trust established for Clarette’s assets has nullified the fee award because the funds are unavailable for collection. 

The background reveals that Clarette filed for dissolution in May 1987, leading to contentious litigation. After fleeing in October 1988 with Falcon, she was subsequently held in contempt. The trial court awarded Clarette various assets, including half of the cooperative apartment and stocks, while Steven received his business and personal property. A trust was imposed on Clarette’s interests to secure Falcon's return to Illinois and ensure that any remaining assets could be used for attorney fees.

Following the judgment, Steven sought to credit his expenses incurred from searching for Falcon against the amount owed to Clarette from the marital residence. The court granted this request, emphasizing the child's best interests. Pedersen, Houpt contends that the fee award was rendered illusory due to the credits given to Steven. The trial court awarded Pedersen, Houpt $62,467.50 in fees and $5,096.03 in costs, explicitly stating that Clarette alone is responsible for these payments and that none of Steven’s fees should be paid by Clarette.

Pedersen, Houpt is pursuing its own interests in appeals related to attorney fees, focusing solely on findings relevant to payment for its services. The firm does not contest the property division's fairness or the sufficiency of assets awarded to Clarette for covering its fees. Instead, it argues that Clarette lacks income and that Steven should be ordered to pay the fees due to his financial capacity. The firm also contends that the trial court undermined the fee award by imposing a trust on Clarette's property, which could be diminished by Steven’s reimbursement claims. Additionally, Pedersen, Houpt objects to the trial court's decision to allow Steven to present his expenditures in a closed session, excluding the firm from the process.

Steven challenges the appeal on the basis that Pedersen, Houpt lacks standing to contest the fee allocation and the trust's creation and management. He acknowledges that attorneys can seek fee awards in their name under section 508(c) of the Marriage and Dissolution of Marriage Act. However, he asserts that the law firm cannot appeal the allocation of fees between parties or the establishment of a trust for the child's benefit. Section 508 allows for attorney fees to be awarded directly to attorneys, thus encouraging representation for spouses with limited resources. While attorneys have a sufficient interest in their fee awards to establish standing, the firm’s claims regarding asset division are considered derivative of Clarette's rights. Clarette, having violated court orders and absconded with the child, is typically the party entitled to contest the property distribution. Consequently, Pedersen, Houpt finds itself in a precarious position, necessitating a relaxation of the standing doctrine to assess the merits of its claims.

In Appeal No. 1-89-3348, Pedersen, Houpt contends that the trial court improperly held Clarette, rather than Steven, responsible for attorney fees incurred on Clarette's behalf. Under section 508(a) of the Act, the court may order either spouse to pay attorney fees after considering the financial circumstances of both parties. Pedersen, Houpt argues that the trial court abused its discretion by assessing fees against Clarette given her financial inability to pay and Steven's capabilities. They assert that Clarette's financial situation was worsened by the court directing most of her property award into a trust for Falcon’s benefit, noting her low income and lack of maintenance. The firm challenges the existence of $72,000 in stock during the trial, arguing that Steven should not bear the burden of proving its status. The court, however, maintained that it had sufficient evidence regarding Clarette’s financial condition, including her ownership of a nonmarital limited partnership interest and her ability to support herself and her child during extensive travels. Without Clarette's testimony during the fee petition hearing, the court concluded that her attorneys did not meet their burden of proving her inability to pay. Thus, it upheld the decision that denied the request for Steven to cover Clarette's legal fees. The ruling emphasizes that the burden of proof lies with the party seeking relief and that deficiencies in evidence regarding Clarette’s finances are attributable to her attorneys. Additionally, the court acknowledged that Steven’s financial assessment should include his living expenses and expenditures related to efforts to retrieve his child, highlighting the complexity of determining ability to pay in these circumstances.

Evidence presented by Pedersen, Houpt to justify Steven's ability to pay attorney fees includes ownership of Vintage Vinyl valued at $50,000, half of the apartment worth $65,000, and "use of the 503(g) trust." However, the law firm does not provide adequate facts to demonstrate Steven's financial capacity, especially given his existing debt of $37,000 owed to his own lawyers on a total bill of $62,880. The court concluded that unless it could be shown that paying the $67,000 fees would not threaten Steven's economic stability, the claim of financial ability cannot be substantiated. The court also rejected Pedersen, Houpt's assertion that it was punitive to deny requiring Steven to pay Clarette's fees, clarifying that the decision was based on the firm's failure to prove Steven's financial capability, not on blaming them for Clarette’s conduct. Clarette's actions led to hardships for her attorneys, not due to financial status but because of her absence. The trial court was praised for its fair handling of the proceedings and did not penalize Clarette regarding property division or fees. Moreover, the court's decision to place Clarette's assets into a section 503(g) trust, preventing their use for fee satisfaction until Falcon is returned, was deemed within its discretion. The law firm suggested alternative asset division methods, but the court prioritized the child's best interests under the relevant statute.

Pedersen, Houpt does not dispute the court's authority to establish a trust in this case. The trial judge determined that Clarette's relocation with the minor child from the court's jurisdiction justified the imposition of a trust under Section 503(g) to ensure the child's safe return. The law firm’s interest in the trust assets is tied to their fee collection, which the court deemed reasonable and necessary. However, the Act does not mandate prioritizing attorney fees over the child's welfare, leading to the conclusion that Pedersen, Houpt lacks valid grounds to contest the trust's establishment. The court prioritized the child's interests over the firm's fee collection convenience, affirming the trial court's discretion.

In Appeal No. 1-90-2049, Steven sought a determination of credits for expenses incurred in locating his son, six months post-dissolution judgment. Initially challenged, the court permitted Pedersen, Houpt to represent its interests regarding attorney fees. The trial court later allowed Steven’s request, granting an in-camera hearing to assess his expenditures while excluding Pedersen, Houpt due to their connection with Clarette's father, which could compromise the child's best interests. A trustee was appointed to evaluate the legitimacy of Steven’s claims. Clarette did not challenge the imposed trust or the dissolution judgment, confirming that Pedersen, Houpt could only contest Steven's petition as it pertained to the firm's fees. Pedersen, Houpt argued that the trial court improperly modified the property award without meeting post-judgment relief standards. However, the court classified the marital residence disposition as "in the nature of child support," allowing modifications upon a significant change in circumstances.

The trust was established to ensure Falcon’s safe return, with the court ruling that Steven could not receive credit for expenses incurred before the divorce judgment was entered. Unlike In re Marriage of Redmer, where a spouse attempted to change property rights post-divorce, Clarette’s interest in the marital home was subject to a trust from the beginning, prioritizing funds for Falcon’s return and attorney fees only if there were remaining assets. This arrangement indicated that Clarette's interest had not vested unchangeably. As such, Steven did not need to file a section 2.1401 post-judgment relief petition. 

The trial court's decision to bar the law firm Pedersen, Houpt from the prove up of Steven’s claimed credits was justified. Steven sought to protect the confidentiality of his efforts to locate Falcon, especially given the law firm’s connection to Clarette. The court appointed a trustee to verify Steven's expenses, which totaled over $65,210.02, deemed reasonable and necessary for locating Falcon. This amount was credited against the $65,000 Steven owed Clarette for her interest in their cooperative apartment, leading to an assignment of that interest to Steven. The court appropriately prioritized Falcon's safe return over the law firm’s participation, finding no abuse of discretion in its rulings. The trial court's decisions were affirmed.