Olson Law’s Attorney Letter
The Law Office of Peter R. Olson Olsonlawfirm.net 312-629-9900 Summer 2009, Vol. III, No. 3
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What Happens When a Child Moves in with the “Other” Parent without Court Approval (and what about Child Support?)?
I have certainly had situations where a client has told me that their son or daughter is now living with them and that she and her former spouse (or the father) had made an agreement to either stop child support payments or to modify the child support payments. This is all done without court approval as neither side has any idea what they are doing and neither party bothered to retain an attorney to do it in a legally enforceable manner. More than likely the client standing before me has just recently been served with paperwork accusing them of not paying child support. Is This Private Agreement Between the Parties Enforceable? In almost all cases, the answer is a resounding “No”. Initially, in 1988 the Illinois Supreme Court in the case of Blisset v. Blisset, 123 Ill.App. 2d 161 (1988) held that the setting of child support was a judicial function. Accordingly, private agreements to modify or abate child support payments without court approval are unenforceable. In the Blisset case the parents agreed that the father would stop paying child support in exchange for giving up his right to visitation (sound familiar). The Illinois Supreme Court explained that such agreements are invalid because the courts need to protect the children‟s best interest and, accordingly, cannot allow a parent to unilaterally bargain away the children‟s right to support. Child support is the children‟s right to support, not the custodial parent‟s right to receive the child support payments. However, the Blisset court did give some guidance with relation to when the non-custodial parent could reasonably rely upon the custodial parent‟s alleged agreement to forego child support. This would be when the non-custodial parent would be equitably estopped (or in non-legalese STOPPED) from recovering past due child support. In the Blisset case the husband was told by an Assistant‟s State‟s Attorney that such an agreement (to stop paying child support in exchnge for giving up visitation rights) was invalid and as a result of the State‟s Attorneys advice the husband could not reasonably rely on the ex-wife‟s alleged agreement to forego child support. The Court found that the husband had failed to establish equitable estoppel. What is equitable estoppel? Equitable estoppel exists where a party in a domestic relations case, by something he says or does induces another (the non-custodial parent) to rely to his or her detriment on the statement or conduct. For example, a child stops living with her father and moves in with her mother. Father tells mother that she need not pay any further child support. But, down the road father tries to recover child support form the mother. This is where the defense of equitable estoppel might be used. The First District Appellate Court in the case of In re the Marriage of Duerr, 250 Ill.App.3d 232, reviewed the Blisset decision and found that the Illinois Supreme Court had reasoned that a party is not equitably estopped from seeking child support arrearages even though there was some sort of agreement to waive support in exchange for the non-custodial parent‟s relinquishment of visitation rights. The Illinois Supreme Court specifically found that the forfeiture of visitation rights and the failure to anticipate an action for unpaid support did not constitute the detriment required to establish an equitable estoppel defense. The Duerr court then went further to fashion what type of conduct would constitute equitable estoppel: “In contrast to the above-noted cases, the Illinois Courts have tended to find that an informal change in custody preceding a cessation of child support payments lends credibility to an assertion of the defense of equitable estoppel.
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In these cases, as in the present one, whether the parties had agreed to the cessation or suspension of child support payments during the time the custody arrangement was altered, was a matter in dispute.” However, the fact that the respondent was in custody of the child and fully supporting him or her during the period in question provided evidence that the respondent was acting to his or her detriment in reasonable reliance upon an agreement with the petitioner. Under these circum stances, the trier of fact could properly find the petitioner estopped from asserting an arrearage in child support. Johnston v. Johnston (1990), 196 Ill.App.3d 101. It is important to note that in these cases the child‟s support rights are not bargained away as the child is being supported by the obligor parent. Nor are visitation or any other of the child‟s best interests compromised. Further, under these circumstances, a finding of equitable estoppel precludes the petitioner from receiving an unwarranted benefit; the windfall of support payments for support she or he has not actually furnished. In Duerr the First District Appellate Court observed that in such cases the children‟s right to support is not compromised because they are actually being supported by the spouse obligated to pay and any payment to the noncustodial spouse results in a windfall. The First District Appellate Court held that the trial court did not err in finding that the mother was equitably estopped from claiming past due support. The most recent case on the subject is a Second District and is entitled In re the Marriage of Jungkans 364 Ill.App.3d 582, 847 N.E.2d 1471, (2006). In the Jungkans case the Respondent, Keith Jungkans appealed the Trial Court‟s finding that he owed $14,750.00 in overdue child support payments to the Petitioner, Marie Jungkans. He presented a defense of equitable estoppel. In 1992 the trial court had dissolved the parties marriage and awarded custody of the parties children to the Petitioner and ordered Respondent, Keith Jungkans to pay $250.00 per month as and for child support. In 1994 one of the children went to live with the Respondent and continued to live with him until she was emancipated. Beginning in January of 1995 the Respondent reduced his child support payments to $125.00 monthly. Respondent states that he believed that the Petitioner agreed to the reduction in child support. The Petitioner denied making the arrangements but acknowledged that she made no effort to collect the additional child support for nearly nine years. It was only after the Petitioner started working for DuPage County that she learned that the Illinois Department of Public Aid might help her to collect the past due child support. The Department did intervene on the Petitioner‟s behalf and filed a Petition Declaring a Child Support Arrearage. The Respondent filed a Petition to Abate Child Support and also raised an affirmative defense of equitable estoppel. Here, one of the parties‟ children went to live with respondent, the obligor spouse. Respondent then reduced his child-support payments in half, and petitioner accepted these payments for approximately nine years. Duerr and Johnston teach that equitable estoppel at least potentially applies in this situation. We note that Blisset, while holding that private agreements modifying child support are not enforceable as such, never stated that equitable estoppel could never apply where a spouse seeks past-due support. The court held only that the father in that case had failed to establish it. Thus, Duerr and Johnston are not inconsistent with Blisset in finding equitable estoppel. Moreover, the holdings in those cases are consistent with the policy underlying the Blisset decision. **It is instructive in these hard economic times to be aware of these decisions in the event another parent attempts to collect support from you that he or she may not be entitled too. I’ve used this defense several times to save clients thousands of dollars. Of course the better way to do things if a child or children come to live with you would be to formally change custody and then seek child support from the other parent yourself. That’s far more reliable and it’s not just a defense for a failure to pay child support, it’s a way to get support paid to you. PO**
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Did you know that repeat clients of The Olson Law Firm, LLC are given a 25% discount on attorney’s fees?
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Client question: Are agents acting under a power of attorney entitled to compensation and if so, how much?
Yes, the Illinois Power of Attorney Act specifically provides that an agent is entitled to “reasonable compensation.” But what‟s reasonable? And, how can the agent who wishes to be compensated without taking advantage of a principal who‟s potentially now disabled determine what‟s reasonable, and what happens if other relatives disagree on what‟s a reasonable fee? One approach I often recommend is to set a fairly minimal hourly rate ($25 or $50), on the grounds that that‟s what it would take to hire someone to do fiduciary tasks like basic book-keeping and bill-paying. Additionally, the lower the compensation taken the less likely to create controversy and also the more likely a court would approve of the rate if it would ever come to that. Yet more difficult book-keeping or accounting should likely be valued differently than say writing a few checks in order to pay a principal‟s monthly house bills. „Reasonable‟ is intentionally vague because it depends on the circumstances. These are some factors to consider: 1) the size of the estate; 2) the work performed; 3) the skill with which it was performed; 4) the time required; 5) the advantages gained or sought by the services performed; 6) the good faith 7) diligence, and 8) prudence of the person performing the services; and 9) the complexity of the administration or task. As a generalization, where family members opt to take compensation, they should do so at a rate slightly less than market rate on the assumption that they don't have the same skills as a professional in the market. Regardless of the method chosen the critical issue is keeping thorough and contemporaneous records of everything you‟ve done. Sooner or later you likely will have to justify whatever you charge, if you don‟t have time records, you‟re in trouble.
*Email your questions to Diane at dianeb@olsonlawfirm.net for future newsletter issues.*
**DISCLAIMER: Actual resolution of legal issues depends upon many factors, including variations of facts and state laws. This newsletter is not intended to provide legal advice on specific subjects, but rather to provide insight into legal developments and issues. The reader should always consult with legal counsel before taking action on matters covered by this newsletter.
Case law update – July 2009
_____________________________________________________________________________________________ In re Marriage of Guthrie, No. 5-08-0095, 5th District, (June 26, 2009). Trial court properly considered all of the appropriate factors and concluded that it was in the minor child of the parties‟ best interests to give the mother permission to remove the child to Arizona, where the parties were married in 2006, and where the plaintiff had better opportunities for stable employment and the help and support of her extended family. Further, the father‟s extended family refused to speak with the mother/plaintiff and the father/defendant had a dismal history of gainful employment and support.
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How might this apply to you? An interesting case about a mother‟s desire and a court‟s approval allowing her to move to Arizona from Illinois with one child following a divorce from the child‟s father. This was a close case, the father and his extended family were involved with the child‟s life. But, the court noted the father‟s poor record of employment and payment of child support in granting the mother‟s request to re-locate. The conclusion, noncustodial parents must do everything right or the custodial parent might just get up and leave and a court won‟t stop it. American Management Consultant, LLC v. Carter, No. 3-07-0714, 3rd District, (June 16, 2009). Trial court erred when it granted plaintiff's forcible entry complaint against the defendant in disputed claim for possession of demised premises because plaintiff's notice failed to comply with Section 9-209 of Code of Civil Procedure in that it served 5 day notice by posting on door when plaintiff knew that defendant was in possession of demised premises; and further, failed to comply with Section 1602(g)(1) of FDCPA. How might this apply to you? The key issue here is the importance of the pre-lawsuit notices in landlord-tenant cases. Whether a 5, 10, or 30-day notice is appropriate, the text of the notice must be correct and it must be served on the defendant correctly. If the notice or service of the notice is improper, your lawsuit will be shot out of the water immediately. Have an attorney do the notices or get instruction on how to properly complete the notices by an attorney. Square v. KFC National Management Company, No. 2-08-0472, 2nd District, (June 12, 2009). After stipulated bench trial, trial court‟s ruling that plaintiff, landlord is entitled to no more damages than the funds it has already received from guarantor of bankrupt tenant‟s lease; because plaintiff failed to mitigate damages, as required by Section 9-213.1 of Code of Civil Procedure, is consistent with stipulated record. Defendant was willing to enter into lease agreement on same terms as bankrupt former tenant; but landlord insisted on 60 day out clause. The case talked about how a guardian must invest a ward‟s estate. The Estate here contained some $15,000,000 and the guardian, Northern Trust Bank, held some 50% of the Estate‟s assets in investments earning only 1% interest. The court said this violated the prudent person investment standard. If you find yourself as the guardian of an estate or the executor of a decedent‟s estate get proper legal advise regarding how you must invest the estate‟s assets. How might this apply to you? An interesting case highlighting a landlord‟s responsibility to mitigate damages once a tenant has defaulted under a lease. This is the idea that a landlord can‟t simply allow a unit to remain vacant for a long period of time, once a tenant has defaulted on his lease, without actively marketing the property in an attempt to get the unit re-rented. Proper advertising and marketing are important but a landlord must also be reasonable in the lease terms that it is willing to accept from the new tenant. In re Estate of Joseph Collins Lieberman, a Minor, No. 2-07-0451 & 2-07-0452 Cons., Second District, (May 28, 2009). Trial court erred when it struck wards‟ objection to accounting filed by corporate guardian alleging that guardian breached its duty under prudent person standard by investing in its short term investments account for over a year when guardian knew that wards had sufficient other income and assets to meet their current needs. How might this apply to you?
In re The Application of the County Treasurer and Ex Officio County Collector of Cook County Illinois v. Dunn, No. 1-08-1445, First District, (April 30, 2009). Trial court erred when it granted property owner an equitable redemption of property and refused to quash tax buyer‟s petitions to quash tax redemption; because property owner failed to make any payment within extended time for redemption; but instead challenged clerk‟s computation of estimate. Owner could have taken advantage of the remedy set forth in Section 21380 of the Property Tax Code and paid the estimate under protest.
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How might this apply to you? Another sad story of a person who lost his home due to a failure to pay one installment of property taxes and then a failure to understand the redemption process in correcting the improper payment after the fact. The homeowner failed to pay taxes and an investor bought those taxes a couple years later. Then, from the point the investor buys the taxes, the homeowner has 3 years to buy back or “redeem” the unpaid taxes. Here, the homeowner questioned the clerk‟s office total he was required to pay, he didn‟t pay anything, and the investor subsequently was awarded the real estate. In re Marriage of Schmitt, No. 2-07-0623, Second District, (April 30, 2009). Trial court erred when it classified all businesses and real estate purchased by husband during marriage as non marital because he purchased them with funds from Subchapter S corporation which he owned prior to marriage; because husband could not recall whether funds used to purchase properties and businesses in his individual name were charged against his retained earnings account; and evidence is insufficient to overcome the presumption that assets are marital, particularly since he took salary of only $20,000 per year since marriage in 1974. How might this apply to you? The case looked at the difference between marital property (property that a court can divide in a divorce) and non-marital property (property that stays with the particular individual who brought it into the marriage). Generally any property acquired or created by either spouse individually or jointly during a marriage is marital property. Here the husband was making transactions through a small business he controlled but the trial court wrongly said that this made that property non-marital property…WRONG! In re Marriage of Awan, No. 3-07-0068, Third District, (February 17, 2009). Trial court properly divided marital estate as of the date of entry of judgment of dissolution in bifurcated proceeding. However, it erred when it decided to value real estate based on most recent valuation at hearing on all matters other than grounds rather than entry of judgment of dissolution. In addition, award of reviewable maintenance to wife, who holds masters degree from Pakistani University that she was having difficulty getting recognized, and whose only employment during marriage was several months early on, is not an abuse of discretion. Further, trial court‟s determinations that loans from wife's brothers were marital debt, that husband dissipated marital assets, and that husband should pay a portion of wife's attorneys' fees, are not erroneous. How might this apply to you? I found the dissipation portion of this case most interesting and potentially applicable. Dissipation, of course, is a spouse‟s lavish spending of money that‟s part of a marital estate on unusual expenses or things unrelated to the marriage, after the time at which a court says a marriage is going through an irretrievable breakdown. Here the husband spent $76,000 for things like a car and financial support for his girlfriend. The court ordered that he repay the former wife $38,000. In re Marriage of Davenport, No. 02-080109, Second District, (2-27-09). The parties were divorced in 1972. In 2007, Petitioner filed a petition to enjoin the Respondent from dissipating funds that Respondent was about to receive from the sale of family property. Petitioner alleged that Respondent had not paid any child support ($13.00 per week for three children) since the last court hearing in 1981 seeking to enforce payments. The trial court found that the arrears in child support, with interest,, came to $26,000.00. Respondent appealed arguing that until July 1, 1997, there was a 20 year statute of limitations on bringing an action to enforce child support. The action in this case wasn‟t filed until 2007. Additionally, the doctrine of laches should apply. The Appellate Court affirmed the trial court using the amendment that allowed for an action to enforce child support can be filed at any time; there is no statute of limitations. The doctrine of laches does not apply because the lack of diligence on the part of the petitioner did not result in any prejudice to the Respondent. The youngest child of the parties was 44 years old when the court enforced the support order. How might this apply to you? A good refresher that anyone who‟s paying or receiving child support MUST know: there is no statute of limitations on a child support judgment (unlike a non-child support judgment where there‟s a 20-year statute of limitation). Here the child for whom the support was for happened to be 44-years-old. That doesn‟t matter, unpaid support never goes away. The
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moral of the story, if you lose a job or can‟t pay courtordered support, get the order modified or a large arrearage will start to build-up and it won‟t go away until it‟s paid. In re Marriage of Abrell, No. 1-07-755, First District, March 25, 2009. The Supreme Court accepted this case that raises the question of whether vacation and sick time should be considered marital property. The trial court made a division of the husband‟s vacation and sick days with a value of approximately $15,000.00. The 4th District Appellate Court reversed the trial court holding that vacation and sick days are not property but are a substitute for wages if and when the employee is unable to perform his duties. The former contends that vacation and sick days are not mentioned in the statute as an exception to what is marital property. It will be interesting to see what the Supreme Court decides. There are two old cases in the 4th District that listed sick and vacation days as marital property but never considered or ruled that they are marital property. How might this apply to you? The trial court placed a monetary value on the husband‟s sick and vacation days and awarded the wife a portion of that amount as part of the divorce settlement. The appellate court overruled the decision and said sick/vacation days are not marital property. These sick days can be valued at tens of thousands of dollars. The Illinois Supreme Court has agreed to look at this case so we‟ll see what the final answer is on this issue.
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