In re Marriage of Osseck ( 2021 )

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Appellate Court Date: 2022.02.03
11:16:55 -06'00'
In re Marriage of Osseck, 2021 IL App (2d) 200268Appellate Court In re MARRIAGE OF STEVEN J. OSSECK, Petitioner-Appellee,
Caption and TONI R. OSSECK, Respondent-Appellant.
District & No. Second District
No. 2-20-0268
Filed March 19, 2021
Decision Under Appeal from the Circuit Court of Boone County, No. 16-D-31; the
Review Hon. Ronald A. Barch, Judge, presiding.
Judgment Affirmed in part and vacated in part.
Cause remanded.
Counsel on Paulette M. Gray, of Gray & Gray LLC, of Crystal Lake, for appellant.
Appeal
James T. Zuba, of Zuba & Associates, P.C., of Rockford, for appellee.
Panel JUSTICE BRENNAN delivered the judgment of the court, with
opinion.
Justices McLaren and Hudson concurred in the judgment and opinion.
OPINION
¶1 On June 13, 2017, the marriage of petitioner, Steven J. Osseck, and respondent, Toni R.
Osseck, was dissolved pursuant to the Illinois Marriage and Dissolution of Marriage Act (Act)
(750 ILCS 5/101 et seq. (West 2018)). On March 6, 2020, the trial court granted Steven’s
petition to modify maintenance, retroactive to January 1, 2020, and subject to review on July
28, 2021. Toni appeals. She argues that Steven did not prove a substantial change in
circumstances and that, even if he did, the trial court did not adequately consider the factors
set forth in sections 510(a-5) and 504(a) of the Act (750 ILCS 5/504(a), 510(a-5) (West 2018))
when issuing the modified maintenance award. Steven responds that the March 6, 2020, order
was not final and appealable because it was temporary in duration and subject to future review
by the trial court.
¶2 For the reasons that follow, we determine that the order was final and appealable. The trial
court did not abuse its discretion in finding a substantial change in circumstances, but it did
fail to adequately consider the factors set forth in sections 510(a-5) and 504(a) of the Act when
issuing the modified award. We affirm in part, vacate in part, and remand.
¶3 I. BACKGROUND
¶4 On February 18, 2016, Steven filed his petition for dissolution of marriage. On June 13,
2017, Toni and Steven, then ages 56 and 60, respectively, entered into a marital settlement
agreement (MSA). The trial court approved the MSA and entered the judgment of dissolution.
This ended the parties’ 29-year marriage. The parties’ two children had attained majority, and
the younger child was set to begin college at Southern Methodist University.
¶5 According to the terms of the MSA, the marital estate, valued at approximately $2 million,
would be split 60/40 in favor of Toni. Among other assets, Toni was awarded a California
condominium, valued at $735,000, which she had been living in for the previous nine years.
Steven was awarded an efficiency studio and hangar at an airpark, valued at $185,000, along
with his airplane, valued at $160,000. Steven would pay for the younger child’s college
education, up to the tuition amount charged by the University of Illinois at Urbana-Champaign.
¶6 The MSA addressed maintenance in pertinent part:
“1. Amount: Husband’s current gross base[1] annual income is $811,218. Wife did
not work outside the home during the parties’ marriage and has no income. Husband
shall pay Wife $18,500 per month as and for maintenance.
2. Duration: The parties have been married for 29 years and, therefore, Husband’s
maintenance obligation shall be permanent subject to statutory termination events.”
¶7 On August 27, 2018, Steven petitioned to modify maintenance, alleging an anticipated
decrease in annual gross income to $635,000. On October 26, 2018, Steven withdrew his
petition. Steven’s 2018 gross income was, in fact, $766,894.
1
The reference to a “base” income is a misnomer. The parties agree that, when the MSA was
entered, Steven’s income was entirely commissions-based.
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¶8 A. The Subject Petition to Modify and the Hearing
¶9 On August 19, 2019, Steven filed a second petition to modify maintenance, which is the
subject of the instant appeal. He again alleged an anticipated decrease in annual gross income,
this time to $592,000.
¶ 10 On February 10, 2020, the trial court conducted a hearing on the petition to modify. Steven
argued that he suffered a substantial change in circumstances when his company changed
ownership and the new ownership overhauled his compensation structure, resulting in a
decrease in income.
¶ 11 Prior to July 1, 2019, Steven’s compensation was entirely commissions-based. He was
permitted to draw up to $3000 per week as an advance on his commissions, but any draw would
be subtracted from his pay at the end of the month. Under that compensation structure, Steven’s
annual gross income had been as follows: $742,000 (2011); $854,551 (2012); $773,166 (2013);
$938,267 (2014); $808,004 (2015); $801,160 (2016); $825,160 (2017); and $766,894 (2018).
Toni does not dispute these amounts.
¶ 12 After July 1, 2019, the new ownership implemented a new compensation structure. Under
the new structure, Steven would receive (1) an annual base salary of $250,000; (2) the
possibility of a quarterly bonus, which would be tied to the company’s overall performance,
and which, if earned, would range between 10% and 50% of the base salary; (3) the possibility
of an annual bonus, which would be tied to individual sales, and which, if earned, would range
from 0% to 400% of the base salary; and (4) temporary “bridge” payments to help employees
“more smoothly transition” to the new compensation plan. To be eligible for the annual bonus,
Steven’s sales would have to exceed $11 million. Under the bridge program, Steven would
receive $22,222 per month between July 1, 2019, and December 31, 2019; $16,667 per month
between January 1, 2020, and June 30, 2020; and $11,111 per month between July 1, 2020,
and December 31, 2020. Beginning January 1, 2021, the bridge payments would terminate. In
no circumstance could Steven’s total annual compensation exceed $1,537,500. This
information was set forth in a detailed company document, Exhibit No. 2. This information
was also set forth in a chart created by Steven, “Steve’s Future Compensation-Guaranteed,”
Exhibit No. 3.
¶ 13 As of February 10, 2020, Steven had experienced two quarterly bonus cycles. He received
a $10,000 bonus for the third quarter of 2019. He received $31,000 for the fourth quarter of
2019. Steven received the 2019 fourth-quarter bonus in 2020, so he did not count it as part of
his gross income for 2019.
¶ 14 Steven’s gross income for 2019 was $688,000. However, his income was less in the second
half of 2019, after the change in compensation structure, than in the first half of 2019. In the
second half of 2019, he earned $258,000, exclusive of bonuses. This resulted in a split of
$420,000 to $268,000 ($258,000 plus the $10,000 quarterly bonus), assuming the $31,000
bonus was not counted until 2020.
¶ 15 Steven believed that his quarterly bonuses in 2020 would be minimal. He explained that
the business was not doing well. He believed that the two quarterly bonuses he had received
were higher than technically earned; they were an attempt to convince him to stay with the
company.
¶ 16 Further, he believed that his chances of receiving any annual bonus were slight. He
explained that the annual bonus would be based on his individual sales. To receive any bonus,
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he would have to reach $11 million in sales. However, sales trended down in 2019. For
example, in 2017, he reached just over $11 million in sales. In 2018, he reached $12 million in
sales. In 2019, however, he reached just under $8.7 million in sales, with sales in the second
half of the year down $1 million from the first half of the year. In addition to coming from
Steven’s testimony, this information was set forth in a chart created by Steven, “Sales
Applicable to Steve,” Exhibit No. 12.
¶ 17 As a result, Steven forecast his 2020 gross income to be only slightly higher than $416,666.
This was the amount of his base pay, plus the bridge payments ($250,000, plus $16,667 x 6,
plus $11,111 x 6 = $416,666). As he previously testified, he did not anticipate significant
quarterly bonuses or any annual bonus.
¶ 18 In concluding his testimony on direct examination, Steven noted that the MSA, while not
setting forth a percentage-based award, set forth a maintenance amount that happened to be
27.4% of his gross annual income at that time. He proposed a solution:
“Q. Are you asking that the judge from the time you filed your petition to set
maintenance at 27.4% of your gross income?
A. I am. I think that’s the only fair way of such an unpredictable compensation plan
other than base pay.
***
Q. And do you believe that this is fair because while you don’t believe you’re going
to get [bonuses] it’s possible you might get [bonuses], right?
A. It’s possible.”
Steven agreed to provide Toni with “each and every” paystub as well as his income tax returns
so that she could verify his income. Steven wished to retire at age 65.
¶ 19 During cross-examination, Steven testified that Toni never worked outside the home over
the course of the marriage and that she owned and maintained horses. This prompted a
discussion on the parameters of the evidence for the purposes of establishing a substantial
change in circumstances:
“[STEVEN’S COUNSEL]: I think her needs now [as opposed to during the
marriage] are what’s important.
THE COURT: Only if I grant the petition.
[STEVEN’S COUNSEL]: Right, right.
THE COURT: Okay. So the basis for the change has little to do with her financial
situation.
[STEVEN’S COUNSEL]: Correct. Absolutely. The basis for the request is my
client’s significant drop in income. It has nothing to do with her expenses, but I guess
in my view when you’re going to evaluate that, you’re going to look at what the impact
is on her. That’s where I’m coming from, Judge.”
The court instructed the parties to remain focused on the question of Steven’s decrease in
income.
¶ 20 Also during cross-examination, Steven agreed that, in theory, he could earn $1.5 million
annually. That was the limit set forth in his compensation plan. He stated: “[It’s] [n]early
impossible, but I guess anything is possible.” Steven acknowledged that he had underestimated
his anticipated income in the past. His first petition to modify maintenance predicted a 2018
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income of $635,000, and yet his 2018 income was $766,000. The subject petition to modify
maintenance predicted a 2019 income of $592,000, and yet his 2019 income was $688,000.
Steven explained that the quarterly bonuses were higher than he predicted. In addition to being,
in his view, somewhat gratuitous, the quarterly bonuses were based on overall company
performance, which was more difficult to predict than his own individual sales.
¶ 21 Further, Steven acknowledged an upward trend in his investments. Between August 2018
and October 2019, the value of his Raymond James account had grown from $328,211 to
$458,783. Similarly, his 401(k) account had grown from $156,990 to $181,846. The value of
another retirement account increased from $36,930 to $42,324. The growth was due to both
Steven’s contributions and market forces.
¶ 22 Steven satisfied his obligation to pay for the college expenses of the parties’ youngest child,
their daughter, up to the cost of tuition at the University of Illinois. He determined that four
years of tuition at that rate was $140,000. Therefore, after paying $144,000 total to Southern
Methodist University, he ceased payments. His daughter would be able to complete the
payments by accessing her trust fund.
¶ 23 Finally, before Steven learned of the new compensation structure, he took out a $150,000
loan to purchase a house for his girlfriend. His girlfriend intended to “flip” the house. When
she sold it, she would repay Steven $150,000, and she would keep the profit, if any.
¶ 24 Steven called Toni to testify regarding portions of her financial affidavit, dated October 8,
2019. Toni earned $1800 in the prior year as a commission for her work as a talent scout. This
was her total earned income. Toni pays estimated quarterly taxes, and she holds $40,000 in her
checking account to ensure her ability to meet her tax obligations at the end of the year. Toni
continues to spend money on her adult children, for airfare and for food when they visit. Toni
owns a Raymond James investment account valued at $253,812. The value of this account has
increased $20,000 since the entry of the MSA. She also owns a condominium in California,
which she valued at $699,000. In the MSA, it was valued at $735,000, and Zillow currently
values it at $823,000. Toni believed that those values were inflated because a similar unit in
the complex, just “a little bit” smaller than hers, recently sold for $620,000. At the time of the
MSA, Toni had two horses. Now, she has only one. In total, she spent approximately $30,000
annually on her horse. She paid a trainer $650 per month to acclimate her horse to the
surrounding terrain, so that she could more safely ride her horse. She boarded her horse at a
third-party site. She disagreed that she could save money by boarding her horse at her
condominium complex. Her condominium complex had hidden fees associated with such
boarding.
¶ 25 Toni moved for a directed finding, arguing that no substantial change in circumstances had
occurred. The trial court denied the motion.
¶ 26 The parties then immediately proceeded to closing argument. During Steven’s closing
argument, he referenced the original allocation of assets and each party’s respective growth on
investments. The court interjected, questioning the relevance of that information:
“THE COURT: I’m just asking is that appropriate for me to even hear the evidence
on it and take argument on it where really I am looking at whether there’s been a
substantial change in compensation for him, and if so, does—what are the needs of the
parties and what capacity does he have to pay. Isn’t that what I am looking at on a
petition to modify?
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[STEVEN’S ATTORNEY]: Yeah, but I also think that when evaluating [Toni’s]
needs, it’s also good to know what her assets are *** so I’m just going to be brief.”
(Emphasis added.)
The court took the matter under advisement.
¶ 27 B. The March 6, 2020, Written Order
¶ 28 On March 6, 2020, the trial court issued its written order. It made the following factual
determinations. At the time of the original judgment, Steven’s annual gross income was
$811,000, and it had been in that range for many years. The monthly maintenance award of
$18,500 constituted 27.4% of Steven’s monthly gross income. In 2019, Steven’s annual gross
income was $688,369. However, Steven earned significantly more in the first half of 2019,
before the new compensation structure took effect, than in the second half of 2019, after the
new compensation structure took effect. Steven earned $258,000 in the second half of 2019.
(Steven also earned a $10,000 bonus in the third quarter, and a $31,000 bonus in the fourth
quarter, which he did not receive until 2020.) In 2020, Steven was guaranteed to earn $416,666,
which was comprised of the $250,000 base salary and the bridge payments. Steven had not yet
learned whether he would receive a bonus for the first quarter of 2020. In 2021, Steven was
guaranteed to earn $250,000, and the bridge payments would terminate. The trial court deemed
it unlikely that Steven would receive an annual bonus in the future and found that it was unclear
whether he would receive any quarterly bonuses. Nevertheless, the court found it “undeniable
that the revised compensation plan imposed by [Steven’s] employer has materially diminished
the ability to achieve historic gross earnings. Though precision is unattainable at this time, the
evidence and the testimony indicated during 2020 and beyond [that Steven] will more likely
than not earn less than the $688,369 he grossed in all of 2019.” The court determined that
Steven’s diminished earning capacity under the new compensation structure constituted a
substantial change in circumstances.
¶ 29 Upon finding a substantial change in circumstances, the trial court began the next stage of
its analysis. We quote that analysis here: “Having concluded that [Steven] met his burden of
pro[ving] a substantial change in circumstances, the court must determine whether [Toni]
remains in need of maintenance and, if so, [Steven’s] capacity to pay maintenance moving
forward.” (Emphasis added.) The court then discussed Toni’s needs and expenses and Steven’s
ability to pay, each in two paragraphs. Regarding Steven’s ability to pay, the court concluded
that Steve “does not have the capacity to pay maintenance at the rate of $18,500 per month
***. Based upon [Toni’s] need, [Steven’s] capacity and consideration of the factors set forth
in 504(a), ongoing monthly maintenance is appropriate.” (Emphasis added.) The court then
discussed guideline maintenance pursuant to section 504(b-1) (750 ILCS 5/504(b-1) (West
Supp. 2019)). The court remarked: “A guideline maintenance calculation using [Steven’s]
guaranteed 2020 income of $416,664 results in a monthly maintenance obligation of $7313.
But that calculation does not account for the quarterly and annual bonuses for which [Steven]
is eligible.” The court noted the uncertainty of Steven’s future bonuses. The court continued:
“While there is certainly merit to imposing the guideline maintenance calculation
as a base maintenance amount, along with [a] percentage payment connected to any
bonuses received, the court is inclined—on [a] temporary basis—to impose
maintenance as requested by [Steven] in his Petition to Modify Maintenance (27.4% of
his gross). 27.4% of [Steven’s] guaranteed gross for 2020 amounts to $114,165.94
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($416,664.00 x .274) or $9513.83 monthly, which is higher than the guideline
calculation generated using [Steven’s] guaranteed compensation. [Steven] shall also
pay 27.4% of any bonuses paid to him within 30 days of receipt. Each of [Steven’s]
regular and bonus payments shall be accompanied by the pay stub associated with the
payment so that [Toni] can double check his math.
Absent some other substantial change in circumstances, the court will revisit
maintenance [July 28, 2021]. At that point the bridge payments will have ceased and
[Steven] will have had two (2) years of actual experience with the quarterly bonus
program and annual individual performance program set forth in the revised
compensation plan.
IV. Conclusion
For the forgoing reasons, [Steven’s] Petition to Modify Maintenance is heard and
granted. On a temporary basis, [Steven] shall pay [Toni] maintenance at the rate of
27.4% of his gross monthly earnings as base maintenance and 27.4% of the gross of
any bonuses he receives as and for bonus related maintenance. The temporary
maintenance order is subject to review and permanent calculation [July 28, 2021] or
sooner upon proof of a substantial change in circumstances. The temporary change
shall be effective as of January 1, 2020.”
¶ 30 C. The March 11, 2020, Clarification Hearing
¶ 31 On March 11, 2020, the court conducted a clarification hearing. It explained its overarching
rationale: “[W]hat I was hoping to do was get past this transition period to have some picture
as to what’s going to be happening with the quarterly bonus and annual bonus to see what he’s
actually doing so maybe we can do something more definitive.”
¶ 32 This prompted Toni to ask whether the order was final and appealable:
“[TONI’S COUNSEL]: My question to you on this, Judge, is that once you use the
word ‘temporary,’ I don’t think you have an appealable order, and I don’t know if that
was your intention to make this a non-appealable order, which would put my client in
the position you put her for at least another year and a half ***.
(The court takes a recess to check its notes.)
THE COURT: Counsel, I’ll recall the case. I stepped back into chambers to
hopefully find the numbers. I was unable to locate the specific statutory reference, ***,
but it was my intention to make it temporary. ***
[TONI’S COUNSEL]: By saying you intended it to be temporary does not imply
then or exactly mean that you made—that it is not appealable, or do you not have an
answer to that question?
THE COURT: Well, temporary orders I don’t believe are appealable.”
¶ 33 The court explained why it chose a percentage-based award rather than a guaranteed dollar
amount: “I don’t believe I received from [Steven’s counsel] or [his] client enough information
to definitively include how much he’s going to make. That’s my reluctance about setting a
specific number. I did do a calculation using what he’s guaranteed to have, which is a much
smaller number than he’s willing to pay.”
¶ 34 This prompted Toni to ask whether the court held Steven to his burden of proof:
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“[TONI’S ATTORNEY]: They had the burden, and when you say, ‘I didn’t have
enough information to make this determination,’ they didn’t prove their case.
THE COURT: They did prove to me that there’s a substantial change. Let’s not mix
things up.”
¶ 35 This appeal followed.
¶ 36 II. ANALYSIS
¶ 37 On appeal, Toni argues that Steven did not prove a substantial change in circumstances and
that, even if he did, the trial court did not adequately consider the factors set forth in sections
510(a-5) and 504(a) of the Act when issuing the modified maintenance award. Steven responds
that the March 6, 2020, order was not final and appealable, because it was temporary in
duration and subject to review. For the reasons that follow, we determine that the order was
final and appealable. Further, Steven proved a substantial change in circumstances. However,
the trial court did not adequately consider the factors set forth in sections 510(a-5) and 504(a)
of the Act when issuing the modified maintenance award.
¶ 38 Separately, to place this case in context with other maintenance cases, we note that the trial
court did not issue a guideline award amount pursuant to section 504(b-1)(1) of the Act, which
applies to cases in which the parties’ total annual gross income is less than $500,000, unless
the court makes a finding that the application of the guidelines would be inappropriate. 750
ILCS 5/504(b-1)(1) (West 2018). The trial court believed both that Steven’s income, including
bonuses, could exceed $500,000 and that a guideline amount of $7313, based on the guaranteed
portion of Steven’s income, would be too low. In any event, we agree that, based on the
evidence presented, the guidelines do not apply.
¶ 39 A. The March 6, 2020, Order Was Final and Appealable
¶ 40 We begin with Steven’s threshold argument that the March 6, 2020, post-decree order was
not final and appealable because it was temporary in duration and subject to review. Steven’s
position was likely prompted by the trial court’s March 11, 2020, comment that, although it
was “unable to locate the specific statutory reference,” it intended to make the order temporary
and it did not believe that temporary orders were appealable.
¶ 41 Steven’s position is incorrect. Post-decree modification orders are final and appealable,
even if they are temporary in duration and subject to review. See, e.g., In re Marriage of Fink,
275 Ill. App. 3d 960, 964 (1995) (section 510 post-decree modification of child support).
Setting a maintenance order for review does not render it unappealable. In re Marriage of
Cannon, 112 Ill. 2d 552, 556 (1986); see also In re Marriage of Lawrence, 146 Ill. App. 3d
307, 310 (1986). Rather, “ ‘[a] judgment is final if it determines the litigation on the merits so
that, if affirmed, the only thing remaining is to proceed with the execution of the judgment.’ ”
Cannon, 112 Ill. 2d at 556 (quoting People ex rel. Scott v. Silverstein, 87 Ill. 2d 167, 171
(1981)). Furthermore, the judgment is enforceable immediately when, even if later modified,
the modification can affect only payments accruing subsequent to the filing of a petition to
modify. Id. Such is the case here. The March 6, 2020, order awards Toni 27.4% of Steven’s
gross income from January 1, 2020, to July 28, 2021. Any subsequent modification can affect
only payments accruing subsequent to the filing of a petition to modify. 750 ILCS 5/510 (West
2018).
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¶ 42 Steven cites pre-decree maintenance cases and statutory authority governing pre-decree
temporary maintenance awards to avoid application of the above authority. See In re Marriage
of Rossi, 100 Ill. App. 3d 669, 672 (1981) (a pre-decree award of $8000 to the wife was not
final, where the court stated that, if it was wrong, it would correct for the award in the final
judgment of dissolution); In re Marriage of Zymali, 94 Ill. App. 3d 1145, 1147 (1981) (absent
an Illinois Supreme Court Rule 304(a) (eff. Mar. 8, 2016) finding, the pre-decree, temporary
maintenance award was not appealable because it did not dispose of all pending claims, such
as in a final judgment of dissolution and property award); 750 ILCS 5/501 (West 2018).
¶ 43 Section 501(a) of the Act sets forth the procedure by which a trial court may enter
temporary, pre-decree maintenance orders:
“Temporary relief. In all proceedings under this Act, temporary relief shall be as
follows:
(a) Either party may petition or move for:
(1) temporary maintenance or temporary support of a child of the marriage
entitled to support, accompanied by an affidavit as to the factual basis for the
relief requested. One form of financial affidavit, as determined by the Supreme
Court, shall be used statewide. The financial affidavit shall be supported by
documentary evidence including, but not limited to, income tax returns, pay
stubs, and banking statements. ***
***
Issues concerning temporary maintenance or temporary support of a child
entitled to support shall be dealt with on a summary basis based on allocated
parenting time, financial affidavits, tax returns, pay stubs, banking statements, and
other relevant documentation, except an evidentiary hearing may be held upon a
showing of good cause. ***
***
(d) A temporary order entered under this Section:
(1) does not prejudice the rights of the parties or the child which are to be
adjudicated at subsequent hearings in the proceeding;
(2) may be revoked or modified before final judgment, on a showing by
affidavit and upon hearing; and
(3) terminates when the final judgment is entered or when the petition for
dissolution of marriage or legal separation or declaration of invalidity of marriage
is dismissed.” (Emphases added.) 750 ILCS 5/501(a), (d) (West 2018).
Thus, it is plain that sections 501(a) and 501(d) set forth summary procedure and termination
criteria that do not apply to post-decree maintenance orders.
¶ 44 Steven cites In re Marriage of Beyer, 324 Ill. App. 3d 305, 314 (2001), for the proposition
that section 501 applies to both pre- and post-decree proceedings. However, Beyer concerned
section 501(c-1) of the Act (750 ILCS 5/501(c-1) (West 1998)), addressing interim attorney
fees. On the specific topic of interim attorney fees, the Beyer court held that section 501(c-1),
and the summary procedure it offered, could provide a useful alternative to the procedure
offered by section 508(a) (750 ILCS 5/508(a) (West 1998)), which contemplates an evidentiary
hearing prior to the award of post-decree attorney fees. Beyer, 324 Ill. App. 3d at 316.
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¶ 45 Steven’s citation to Beyer does not persuade us. Courts have declined to extend the
applicability of section 501 to other types of decree and post-decree proceedings and orders,
such as decree and post-decree maintenance proceedings and orders. See, e.g., In re Marriage
of Oleksy, 337 Ill. App. 3d 946, 950 (2003) (citing Lawrence, 146 Ill. App. 3d 307). Indeed,
“[m]ost post-judgment orders are not temporary orders as contemplated by section 501(a)(1)
of the [Act].” Fink, 275 Ill. App. 3d at 964. The March 6, 2020, order was final and appealable.
¶ 46 B. The Merits
¶ 47 An order of maintenance may be modified only upon a showing of a substantial change in
circumstances since the most recent award. 750 ILCS 5/510(a-5) (West 2018); In re Marriage
of Anderson, 409 Ill. App. 3d 191, 198-99 (2011). A substantial change in circumstances means
that either the needs of the receiving spouse have changed or the ability of the other spouse to
pay has changed. Anderson, 409 Ill. App. 3d at 198. The party seeking the modification has
the burden to prove that a substantial change in circumstances has occurred. Id.¶ 48 When a court determines that there has been a substantial change in circumstances, it may
modify the maintenance award, but it is not required to do so. Id. at 203. Rather, upon
determining that there has been a substantial change in circumstances, the court must next
weigh the same factors it considered when it made the initial award of maintenance and decide
whether and under what terms to modify the award. Id. at 203-04. The Act requires
consideration of the factors set forth in sections 510(a-5) and 504(a). 750 ILCS 5/504(a),
510(a-5) (West 2018); see also Blum v. Koster, 235 Ill. 2d 21, 35-36 (2009).
¶ 49 A trial court’s decision to modify maintenance is reviewed for an abuse of discretion. Blum,
235 Ill. 2d at 36. A trial court abuses its discretion when its decision is arbitrary, fanciful,
unreasonable, or where no reasonable person would take the view adopted by the court. Id.Further, we defer to the trial court, as the trier of fact, on issues of witness credibility and the
weight to be given to the testimony. Anderson, 409 Ill. App. 3d at 199.
¶ 50 1. Substantial Change in Circumstances
¶ 51 We first address the trial court’s determination that Steven’s decrease in income constituted
a substantial change in circumstances. In determining that a substantial change occurred, the
trial court considered the following. At the time of the original judgment, Steven’s annual gross
income was $811,000, and it had been in that range for many years. In 2019, Steven’s annual
gross income was $688,000. However, Steven earned significantly more in the first half of
2019, before the new compensation structure took effect, than in the second half of 2019, after
the new compensation structure took effect. Steven’s quarterly bonuses during the second half
of 2019 were $10,000 and $31,000. In 2020, Steven was guaranteed to earn $416,666, which
was comprised of the $250,000 base salary and the bridge payments. In 2021, Steven was
guaranteed to earn $250,000, and the bridge payments would terminate. The trial court deemed
it unlikely that Steven would receive an annual bonus in the future because, to receive a bonus,
Steven would need to increase his sales from the previous year by $2.3 million. Even if Steven
were to continue to receive quarterly bonuses in the $30,000 range, instead of the $10,000
range, his total 2020 income would be $536,000 ($416,000 guaranteed, plus 4 x $30,000
quarterly bonus). In 2021, his income would be $370,000 ($250,000, plus 4 x $30,000 quarterly
bonus). Thus, the trial court reasonably concluded that, more likely than not, Steven would be
unable to accomplish annual gross earnings in the $800,000 range, Steven would instead gross
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less than the $688,000 he had grossed during the 2019 transition, and there was a significant
possibility that Steven’s gross earnings would fall to the $400,000 to $600,000 range.
¶ 52 In light of these numbers, we cannot say that the trial court abused its discretion in
determining that there was a substantial change in circumstances. Courts have regularly
determined that a decrease in income of more than 25% constitutes a substantial change in
circumstances. See, e.g., In re Marriage of Carpenter, 286 Ill. App. 3d 969, 974 (1997) (the
trial court did not abuse its discretion in determining that a decrease in annual income from
$70,000 to $50,000 constituted a substantial change, even though the paying spouse had earned
more than $100,000 in intervening years); In re Marriage of Izzo, 264 Ill. App. 3d 790, 791-
92 (1994) (the trial court abused its discretion in determining that a decrease in annual income
from $52,000 to $39,000 did not constitute a substantial change).
¶ 53 Toni raises three challenges to the trial court’s determination that there was a substantial
change in circumstances: (1) the trial court did not hold Steven to his burden of proof,
(2) Steven’s evidence was self-serving and speculative, and (3) Steven remained able to satisfy
his maintenance obligation despite any decrease in income. These arguments are unavailing.
¶ 54 First, Toni argues throughout her brief that the trial court did not hold Steven to his burden
of proof. She cites language from In re Marriage of Bernay, 2017 IL App (2d) 160583, ¶ 18,
that a petitioner has a “high burden” to prove a substantial change in circumstances. However,
in discussing the high burden a petitioner must meet to show a substantial change in
circumstances, the Bernay court meant only to stress that a change in circumstances must be
substantial to warrant a modification. The burden of proof is not subject to gradation. The
standard of proof in a civil case is proof by a preponderance of the evidence. See In re
Marriage of Stockton, 401 Ill. App. 3d 1064, 1069 (2010). A proposition is proved by a
preponderance of the evidence if it is proved more likely true than not true. Id.¶ 55 Toni posits, as she did at the clarification hearing, that the trial court could not say both
that Steven proved a substantial change in circumstances and that the circumstances do not
allow for a precise determination of Steven’s 2020 and 2021 income. We disagree, and we find
no logical inconsistency in the two statements. To determine that, more likely than not,
Steven’s income substantially decreased, the trial court was not required to arrive at a precise
calculation and was not prohibited from fashioning an order that hedges against said decrease.
As we will discuss, percentage-based awards, if properly executed, can be appropriate in
situations involving fluctuating or uncertain income.
¶ 56 Second, Toni argues that Steven’s evidence was speculative and self-serving. She cites
In re Marriage of Sisul, 234 Ill. App. 3d 1038, 1040 (1992), for the general proposition that an
award of maintenance must be made on the basis of the circumstances disclosed by the
evidence at the time of the hearing, rather than on speculation. She asserts that two of Steven’s
exhibits, a chart entitled “Steve’s Future Compensation-Guaranteed” (Exhibit No. 3) and a
chart entitled “Sales Applicable to Steve” (Exhibit No. 12), were self-generated and self-
serving. This is, essentially, a sufficiency argument.
¶ 57 We disagree that the evidence was insufficient to prove by a preponderance that Steven has
suffered a substantial change in circumstances. Exhibit No. 3 was demonstrative evidence that
summarized the information contained in Exhibit No. 2, a company document setting forth
Steven’s new compensation structure. Therefore, while Exhibit No. 3 may have been
duplicative, it did not reveal a gap in the evidence. Granted, Exhibit No. 12, listing Steven’s
annual sales, is corroborated only by Steven’s own testimony and is not a company document,
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as the trial court recognized. However, it is for the trial court to determine the credibility of the
witnesses and to assign weight to their testimony. This shortcoming is not fatal, where it is
undisputed that Steven’s annual gross income has decreased significantly. Toni does not
disagree that Steven’s income was $811,000 at the time of the MSA. She does not disagree
that it was $688,000 in 2019 and that Steven earned at least $90,000 less in the second half of
2019 than in the first half of 2019. The bridge payments are certain to decrease. Although
quarterly and annual bonuses remain uncertain, Steven has been through two quarterly bonus
cycles since the implementation of the new compensation structure. The amounts of these
bonuses also support the trial court’s determination that Steven’s income decreased
substantially.
¶ 58 Third, Toni argues that Steven remains able to satisfy his maintenance obligation despite
any decrease in income. She notes that not every decrease in income constitutes a substantial
change in circumstances. Bernay, 2017 IL App (2d) 160583, ¶ 18. In Bernay, the husband’s
employment income decreased from $225,000 to $145,000. However, the appellate court
determined that there had been no change in the husband’s ability to satisfy his $3600 monthly
maintenance payments. Id. ¶ 19. In addition to his salary, the husband had a real estate portfolio
worth $1.1 million, had $1.4 million in retirement accounts, and expected to inherit
approximately $1.9 million from the estates of his recently deceased parents. Id. The wife, in
contrast, earned $27,000 annually as a nurse, and her investments were considerably less. Id.
¶ 12. At the time of the prior modification order, the husband’s investment accounts generated
$40,000 in annual growth, whereas the wife’s investment accounts did not even total $40,000.
Id. ¶¶ 7-8.
¶ 59 This case is not like Bernay. In addition to $145,000 in employment income, the husband
in Bernay had nearly $4.5 million in assets. With these resources, he could easily satisfy his
$3600 monthly support obligation. Steven cannot similarly rely on his assets to satisfy his
support obligation. Steven’s assets, at just under $1 million, are far less, and his support
obligation, at $18,500 per month, is far greater.
¶ 60 Moreover, here, the trial court did recognize that not every decrease in income equates to
an inability to meet existing payment obligations. The trial court could have ordered the
modification retroactive to the date of filing, August 19, 2019. 750 ILCS 5/510(a) (West 2018).
However, mindful that Steven grossed $688,000 in 2019, the court did not find Steven unable
to satisfy the $18,500 monthly obligation for the remainder of 2019, and it ordered the
modification retroactive only to January 1, 2020. The court’s determination that Steven proved
a substantial change in circumstances was not an abuse of discretion.
¶ 61 2. The Modification
¶ 62 We next address the modification. Again, when the movant proves a substantial change in
circumstances, the court may modify the maintenance amount, but it is not required to do so.
Anderson, 409 Ill. App. 3d at 203. The court must consider the statutory factors set forth in
both sections 510(a-5) and 504(a) when deciding whether and under what terms to modify
maintenance. 750 ILCS 5/504(a), 510(a-5) (West 2018).
¶ 63 We set forth sections 510(a-5) and 504(a) of the Act herein. Section 510(a-5) of the Act
provides:
“An order for maintenance may be modified or terminated only upon a showing of a
substantial change in circumstances. *** In all such proceedings, as well as in
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proceedings in which maintenance is being reviewed, the court shall consider the
applicable factors set forth in subsection (a) of Section 504 and the following factors:
(1) any change in the employment status of either party and whether the change
has been made in good faith;
(2) the efforts, if any, made by the party receiving maintenance to become self-
supporting, and the reasonableness of the efforts where they are appropriate;
(3) any impairment of the present and future earning capacity of either party;
(4) the tax consequences of the maintenance payments upon the respective
economic circumstances of the parties;
(5) the duration of the maintenance payments previously paid (and remaining
to be paid) relative to the length of the marriage;
(6) the property, including retirement benefits, awarded to each party under the
judgment of dissolution of marriage, judgment of legal separation, or judgment of
declaration of invalidity of marriage and the present status of the property;
(7) the increase or decrease in each party’s income since the prior judgment or
order from which a review, modification, or termination is being sought;
(8) the property acquired and currently owned by each party after the entry of
the judgment of dissolution of marriage, judgment of legal separation, or judgment
of declaration of invalidity of marriage; and
(9) any other factor that the court expressly finds to be just and equitable.”
(Emphasis added.) 750 ILCS 5/510(a-5) (West 2018).
¶ 64 Section 504(a), in turn, provides:
“(a) Entitlement to maintenance. In a proceeding for dissolution of marriage, legal
separation, declaration of invalidity of marriage, or dissolution of a civil union, a
proceeding for maintenance following a legal separation or dissolution of the marriage
or civil union by a court which lacked personal jurisdiction over the absent spouse, a
proceeding for modification of a previous order for maintenance under Section 510 of
this Act, or any proceeding authorized under Section 501 of this Act, the court may
grant a maintenance award for either spouse in amounts and for periods of time as the
court deems just, without regard to marital misconduct, and the maintenance may be
paid from the income or property of the other spouse. The court shall first make a
finding as to whether a maintenance award is appropriate, after consideration of all
relevant factors, including:
(1) the income and property of each party, including marital property
apportioned and non-marital property assigned to the party seeking maintenance as
well as all financial obligations imposed on the parties as a result of the dissolution
of marriage;
(2) the needs of each party;
(3) the realistic present and future earning capacity of each party;
(4) any impairment of the present and future earning capacity of the party
seeking maintenance due to that party devoting time to domestic duties or having
forgone or delayed education, training, employment, or career opportunities due to
the marriage;
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(5) any impairment of the realistic present or future earning capacity of the party
against whom maintenance is sought;
(6) the time necessary to enable the party seeking maintenance to acquire
appropriate education, training, and employment, and whether that party is able to
support himself or herself through appropriate employment;
(6.1) the effect of any parental responsibility arrangements and its effect on a
party’s ability to seek or maintain employment;
(7) the standard of living established during the marriage;
(8) the duration of the marriage;
(9) the age, health, station, occupation, amount and sources of income,
vocational skills, employability, estate, liabilities, and the needs of each of the
parties;
(10) all sources of public and private income including, without limitation,
disability and retirement income;
(11) the tax consequences to each party;
(12) contributions and services by the party seeking maintenance to the
education, training, career or career potential, or license of the other spouse;
(13) any valid agreement of the parties; and
(14) any other factor that the court expressly finds to be just and equitable.” 750
ILCS 5/504(a) (West 2018).
¶ 65 We emphasize that section 510(a-5) provides that both the section 510(a-5) and the section
504(a) factors are to be considered in “all” proceedings involving the modification of
maintenance, “as well as” in proceedings for review. 750 ILCS 5/510(a-5) (West 2018). For
example, when a maintenance order is up for review, such that the award may be modified
without proof of a substantial change and thus there is no substantial-change threshold, the
court must consider both the section 510(a-5) and the section 504(a) factors. Blum, 235 Ill. 2d
at 35-36. The section 510(a-5) factors add value vis-à-vis the section 504(a) factors and vice
versa.
¶ 66 Here, the record does not support that the trial court considered the requisite statutory
factors. Indeed, some aspects of the closing argument and written order suggest the opposite.
During closing argument, when Steven referenced the original allocation of assets and each
party’s respective growth on investment, the court stated:
“I’m just asking is that appropriate for me to even hear the evidence on it and take
argument on it where really I am looking at whether there’s been a substantial change
in compensation for him, and if so, does—what are the needs of the parties and what
capacity does he have to pay. Isn’t that what I am looking at on a petition to modify?”
(Emphasis added.)
¶ 67 Similarly, in its order, the court wrote:
“Having concluded that [Steven] met his burden of pro[ving] a substantial change
in circumstances, the court must determine whether [Toni] remains in need of
maintenance and, if so, [Steven’s] capacity to pay moving forward.”
¶ 68 This is not the correct analysis, as the court did little more than repeat the substantial-
change analysis. Again, a substantial change occurs when the needs of the receiving spouse
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have changed or the ability of the other spouse to pay has changed. Upon finding a substantial
change, the court must then determine whether and on what terms a modification is warranted,
based on the statutory factors set forth in sections 510(a-5) and 504(a) of the Act. Toni’s need,
or expenses, and Steven’s capacity to pay implicate just a few of the requisite statutory factors.
¶ 69 Similarly, the trial court conducted the hearing in a manner that shows that it did not
understand the proper analysis. Twice, it limited the evidence and argument to the issue of
Steven’s decrease in income. For example, toward the end of his testimony, Steven began to
discuss Toni’s lifestyle. The court stated that Toni’s lifestyle and expenses were relevant only
if it granted the petition. The court instructed the parties to remain focused on the alleged
substantial change, Steven’s decrease in income. This would have been an acceptable
evidentiary approach had the court opened the evidence to consider the section 510(a-5) and
the section 504(a) factors following its determination that there was a substantial change.
Immediately following the denial of Toni’s motion for a directed finding on the substantial-
change issue, however, the parties proceeded to closing argument. Again, during closing
argument, Steven’s attorney referenced the original asset allocation and growth on
investments. The court questioned the relevance of this information: “I’m just asking is that
appropriate for me to even hear the evidence on it and take argument on it.” Steven’s attorney
agreed to “be brief.”
¶ 70 In fact, upon finding a substantial change in circumstances, the original allocation of assets
and subsequent growth on investments are among the statutory factors that the court should
consider. 750 ILCS 5/504(a)(1), (10) (West 2018); 750 ILCS 5/510(a-5)(6), (8) (West 2018).
Here, while Toni received just over $1 million in assets under the MSA, a large portion of her
award was tied up in her home of 10 years, a California condominium valued at $735,000.
Steven, in contrast, lived in an efficiency studio in rural Illinois valued at $185,000. Steven,
who had greater liquid assets, was able to grow the value of his investment accounts by more
than $150,000 in one year (2018 to 2019), whereas Toni was able to grow the value of her
investment account by just $20,000 in three years (2017 to 2020). Steven no longer pays
$35,000 per year in tuition for his daughter. Though these and other factors are relevant when
determining the impact of imposing a reduction in cash flow on either party, the record does
not suggest that the trial court considered them here. Similarly, it does not appear that the court
considered the duration of the maintenance payments previously paid (750 ILCS 5/510(a-5)(5)
(West 2018)) or Steven’s impending retirement (750 ILCS 5/504(a)(5), (9) (West 2010); 750
ILCS 5/510(a-5)(3) (West 2018)). The court set the maintenance order for review on July 28,
2021, noting only that, at that time, it would have a better understanding of Steven’s earned
income moving forward. However, at that date, Steven will be just months away from his
planned retirement at age 65. It should be noted that, in highlighting some but not all of the
statutory factors to be considered, we do not mean to suggest how much weight to give to any
of the factors; we mean only to instruct that all the relevant factors must be considered.
¶ 71 In failing to adequately consider the statutory factors, the trial court simply accepted
Steven’s proposed solution of a purely percentage-based maintenance award. Though not
inherently inappropriate, purely percentage-based maintenance awards have been criticized for
good reason. In re Marriage of Waldschmidt, 241 Ill. App. 3d 7, 12-13 (1993). Relevant here,
courts have expressed concern that a purely percentage-based award might enable the trial
court to “escape its duty” to consider the statutory factors. Id. at 12. Courts have also cautioned
that it can be difficult to calculate the specific amount due each month. Id. at 13. Moreover,
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when imposed by the trial court rather than by the parties’ agreement, a percentage-based
award might thwart the legislature’s intent that the parties prove a substantial change in
circumstances prior to a modification. Id. at 14-15 (Lund, J., specially concurring) (citing 1 H.
Joseph Gitlin, Gitlin on Divorce § 15.12(F), at 359-60 (1991)).
¶ 72 Here, the court’s decision to order a purely percentage-based maintenance award might
very well result in unjust maintenance payments, a possibility we address to discourage such
an occurrence on remand. The court stated that its percentage-based award resulted in a higher
payment than if it had issued a guideline amount, $9513 (plus 27.4% of bonuses) versus $7313
monthly. These figures are based on a guaranteed income of $416,666. However, this income
was not expected to be constant. Due to the step-down structure of the bridge payments,
Steven’s monthly salary will be higher in the first half of 2020, resulting in a payment greater
than $9513. Steven’s monthly salary will be lower in the second half of 2020, resulting in a
payment lower than $9513. More problematic, in 2021, Steven’s guaranteed income will be
$250,000. This allows for the possibility that Toni’s maintenance will be $5708 per month
(27.4% of $250,000 annually), notwithstanding that the trial court had earlier stated that $7313
per month was too low. Simply put, in cases involving very large decreases in income,
percentage adjustments alone can fail to account for the actual needs of the parties.
¶ 73 The better approach, when dealing with fluctuating income, is to bifurcate the award into
a guaranteed dollar amount plus a percentage amount. As the Carpenter court explained:
“In setting a portion of [the wife’s] maintenance payments as a percentage of [the
husband’s] income, the trial court stated that this was the only way to ensure her a
steady stream of income given the fluctuations in [the husband’s] income. *** [The
wife] notes that[,] in In re Marriage of Waldschmidt, [241 Ill. App. 3d 7 (1993)], the
[F]ourth [D]istrict stated in dicta that percentage maintenance awards should be
discontinued, as they have in the case of child support payments, because they present
difficulties in calculating the dollar amount of monthly maintenance payments. ***
[H]owever, maintenance payments based on a single year’s income or an average of
several years’ income also present problems and inherent inequities where the payor
spouse’s income fluctuates from year to year. In fact, setting a lower dollar payment
and coupling it with a percentage award may be the most reasonable method of
handling such situations.” (Emphases added.) Carpenter, 286 Ill. App. 3d at 975.
The difference between Waldschmidt and Carpenter, of course, is that Waldschmidt concerned
a purely percentage-based award, whereas Carpenter concerned a bifurcated award. A well-
crafted bifurcated award requires thoughtful consideration of the statutory factors and has the
benefit of the recipient receiving a predictable portion of the award without delay, so that he
or she can plan a budget.
¶ 74 We acknowledge that, in its written order, the trial court made passing reference to the
section 504(a) factors where it held: “Based upon [Toni’s] need, [Steven’s] capacity to pay[,]
and consideration of the factors set forth in section 504(a), ongoing monthly maintenance is
appropriate.” (Emphasis added.) We also acknowledge that the trial court is not required to
expressly address each factor. However, for the reasons discussed, we determine that the trial
court did not give proper consideration to the appropriate factors. On remand, the court is to
consider the statutory factors set forth in sections 510(a-5) and 504(a) when determining
whether and under what terms to modify the maintenance award.
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¶ 75 III. CONCLUSION
¶ 76 For the reasons stated, we affirm the trial court’s determination that there was a substantial
change in circumstances. However, we remand for the court to reconsider the maintenance
award upon consideration of the statutory factors.
¶ 77 Affirmed in part and vacated in part.
¶ 78 Cause remanded.
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