In re Marriage of Shulga

2019 IL App (1st) 182028
FIFTH DIVISION
September 30, 2019
Nos. 1-18-2028, 1-18-2706 cons.
IN THE
APPELLATE COURT OF ILLINOIS
FIRST JUDICIAL DISTRICT
In re MARRIAGE OF ) Appeal from the Circuit Court
) of Cook County.
JODI SHULGA, )
)
Petitioner and Third-Party Petitioner-Appellee, )
)
and ) No. 14 D 10594
)
RONALD SHULGA, )
)
Respondent )
)
(MARY KLEBBA-SHULGA, Third-Party Respondent- ) Honorable Naomi H. Schuster,
Appellant). ) Judge Presiding.
JUSTICE DELORT delivered the judgment of the court, with opinion.
Justices Hall and Rochford concurred in the judgment and opinion.
OPINION
¶1 This dispute began as a standard divorce case between Jodi Shulga and her husband,
Ronald Shulga. The case ran its natural course and terminated with a judgment for dissolution of
marriage. After Ronald’s death, Jodi filed a third-party complaint against Mary Klebba-Shulga,
alleging that Mary was unjustly enriched because she was receiving a pension as the surviving
spouse of a disabled firefighter pursuant to section 4-114 of the Illinois Pension Code (Code) (40
ILCS 5/4-114 (West 2016)). Jodi’s complaint sought the imposition of a constructive trust. The
Nos. 1-18-2028, 1-18-2706 cons.
circuit court granted the relief sought in Jodi’s amended complaint, and Mary now appeals. We
affirm.
¶2 BACKGROUND
¶3 On November 20, 2014, Jodi filed a petition for dissolution of marriage. The petition
stated that when she and Ronald were married on May 19, 1991, Ronald was employed as a
firefighter by the city of Evanston. The assets listed as property acquired during their marriage
included real property located in Niles, Illinois; vehicles; bank accounts; and “Retirement plans.”
Ronald filed a pro se answer, which consisted of a single sentence: “Yes, I agree to a divorce
from Jodi A. Shulga.”
¶4 On April 12, 2016, the circuit court entered an order dissolving the marriage. The court’s
order incorporated a marital settlement agreement (MSA). Article V of the MSA, entitled
“Marital Property,” provided in relevant part as follows:
“RONALD is currently a participant in the following
accounts:
a. City of Evanston Pension Plan
***
JODI is awarded fifty percent (50%) of the marital portion of said
accounts via a *** Qualified Illinois Domestic Relations Order
(QILDRO) ***. The remaining balance after the disbursement
delineated herein shall be awarded to RONALD as his sole and
exclusive property, free and clear of any claim or interest by JODI.
***. Jodi and Ronald shall take all necessary actions to satisfy the
foregoing conditions and to implement all of the provisions of this
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paragraph (including to amend the judgment to the extent
necessary), and the Court hereby retains jurisdiction for the
purpose of amending this judgment to the extent necessary to
satisfy such condition and implement such provisions even after
the death of one or both of the parties.”
¶5 Ronald was first diagnosed with non-Hodgkin’s small-cell lymphoma in early 2000. On
July 26, 2016, Ronald applied for a line-of-duty disability pension from the Fund, claiming that
his condition prevented him from continued service as a firefighter. Ronald was 55 years old at
the time and had worked for the Evanston Fire Department since May 12, 1987.
¶6 Ronald married Mary in August 2016. On October 20, 2016, the circuit court entered a
QILDRO that, among other things, directed the Evanston Firefighters’ Pension Fund (the Fund)
to pay Jodi 50% of Ronald’s “Monthly Retirement Benefit” that he had accrued from the date of
Ronald and Jodi’s marriage until the date of the divorce. The QILDRO further provided that, so
long as it was in effect, Ronald was prohibited from choosing “a form of payment of the
retirement benefit that has the effect of diminishing the amount of the payment to which the
alternate payee is entitled,” unless that alternate payee consented in writing and the consent was
notarized and filed with the Fund. Both the MSA and the QILDRO are silent with respect to the
allocation of any firefighter death benefits.
¶7 On May 11, 2017, the Board of Trustees of the Firefighters’ Pension Fund of Evanston
(the Board) issued an administrative decision on Ronald’s application. The Board found that,
due to his illness, Ronald had to stop working for the fire department on July 4, 2016. The Board
concluded that Ronald was entitled to a line of duty disability pension benefit pursuant to section
4-110 of the Code (40 ILCS 5/4-110 (West 2016), but subject to any offsets pursuant to section
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4-114.2 of the Code. The effective date of the award was fixed as August 1, 2017, a date when
Ronald would have “exhausted any salary payments from [the City of Evanston]”, but Ronald
died on the same day as the Board issued its decision.
¶8 On May 15, 2017, Mary applied to the Fund for survivor benefits as Ronald’s widow, and
she began receiving 100% of the death benefits from the Fund, whereas Jody received none.
Mary, who was married to Ronald for only nine months, ended up receiving benefits of
$9,169.53 per month as the surviving spouse of a disabled firefighter pursuant to section 4-114
of the Code (735 ILCS 5/4-114 (West 2016). By contrast, Jodi, who was married to him for
nearly 25 years, received nothing, despite the MSA and the corresponding QILDRO order.
Ronald had worked as an Evanston firefighter during his entire marriage to Jodi.
¶9 The divorce case remained dormant until January 18, 2018, when, with leave of court,
Jodi filed her third-party complaint seeking the imposition of a constructive trust against Mary.
Jodi’s prayer for relief sought, among other things, the imposition of a constructive trust upon
any death or survivor’s benefits paid by the Fund, including “those relating to Ronald[’s]
disability pension.”
¶ 10 On May 22, 2018, the circuit court entered an order (1) allowing Jodi to file an amended
complaint, (2) directing the parties to submit “memos” to the court by July 11, 2018, and
(3) setting the matter for “argument on [the] underlying pleading” on July 18, 2018.
¶ 11 On May 30, 2018, Jodi filed her amended complaint against Mary. The amended
complaint differed from the original only because it added wording in the prayer for relief
including Ronald’s “disability pension.” The amended complaint alleges that throughout the
marriage, Ronald was a firefighter for the city of Evanston, and a percentage of Ronald’s salary
was paid into the Fund for retirement purposes. The amended complaint also alleges as follows.
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The spouses agreed to equally divide any proceeds from the Fund, and the circuit court approved
of this arrangement and entered a QILDRO reflecting this division. The QILDRO further
required that Jodi be designated Ronald’s beneficiary upon his death.
¶ 12 In her answer to the original third-party complaint, Mary assserted that “under the Illinois
Firefighters Pension Code [sic], disability benefits are not retirement benefits.” Mary noted that
she only received disability benefits, and since those benefits are not subject to a QILDRO, Jodi
was not entitled to them. Mary’s answer did not challenge the circuit court’s equitable power on
this issue, and it did not assert that Jodi waived disability payments or that she sought an
improper remedy. She also denied that she was unjustly enriched and that Jodi was entitled to an
order imposing a constructive trust on the benefits. The parties later filed memoranda outlining
their respective positions.
¶ 13 Thereafter, no further pleadings were filed with respect to the amended complaint.
¶ 14 On August 27, 2018, the circuit court held a hearing on Jodi’s amended complaint, the
memoranda, and exhibits. During the hearing, the court asked counsel for Mary to address “the
equities argument” that Jodi had raised, namely, “that the parties did, in fact, contract for the
division of the major marital asset following a long-term marriage.” Mary’s counsel responded
that the decision in In re Marriage of Farrell & Howe, 2017 IL App (1st) 170611, addressed
“[t]he exact same argument.” When the court observed that Farrell did not involve the
imposition of a constructive trust, counsel for Mary replied that the former wife in Farrell “still
wanted for them to basically invade or do away with their agreement.” Counsel did not,
however, challenge whether a constructive trust would be an available remedy in this case or
whether the court has the power to impose one. Counsel for Mary also did not argue that, under
the MSA, Jodi waived any claim on Ronald’s disability benefits.
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¶ 15 At the conclusion of the hearing, the circuit court found that it had the power to create a
constructive trust over the amounts paid to Mary, and that Jodi established the “necessary
requirements” for the imposition of a constructive trust. The court further found that, under the
MSA, Jodi was to receive “50 percent * * * of the pension and the death benefits” and that “to
rule otherwise would result in an unjust enrichment to [Mary].” Without objection from the
parties, the court stated that its ruling was based on Jodi’s “petition.”
¶ 16 On September 6, 2018, the court issued a written order finding that Mary was unjustly
enriched. The court stated that it would enforce the MSA. The written order directed that the
parties open a checking account “titled jointly in the name of Mary Klebba and [Mary’s
counsel’s law firm] as trustee for Jodi ***.” On September 18, 2018, Mary filed a timely notice
of appeal seeking review of the circuit court’s September 6, 2018, order granting Jodi the relief
sought in the complaint. This court docketed that appeal as appeal number 1-18-2028.
¶ 17 On October 1, 2018, the court issued a written order modifying its September 6, 2018,
order to require Mary to tender Jodi’s share of the survivor’s benefit payments for deposit into
the client trust account of Mary’s counsel’s law firm. On November 26, 2018, the court issued a
third order, clarifying that the monthly amount payable to Jodi under the October 1 order would
be $4,58.476, which was 50% of the gross monthly amount the Fund was paying to Mary. The
November 26 order also accounted for a small accumulated delinquency in the recent payments,
again stayed enforcement of the judgment, and set forth the parties’ agreement with respect a
bond pending appeal and Mary’s waiver of her right to a refund of payments she made to Jodi in
case of reversal. On December 26, 2018, Mary filed another notice of appeal seeking review of
the orders that the court entered in September, October, and November 2018. This second
appeal was docketed as appeal number 1-18-2706. This court consolidated both appeals.
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¶ 18 ANALYSIS
¶ 19 Mary contends that the circuit court erred in granting the relief sought in Jodi’s amended
complaint. Specifically, Mary argues that the court erred in ruling in favor of Jodi because the
dissolution judgment and the MSA “do not mention disability benefits.” Mary further argues
that the court “had no power, equitable or otherwise, to provide any relief that was not specified
in the MSA.” Finally, Mary adds that Jodi both waived her right to disability benefits under the
MSA and also sought an improper remedy below.
¶ 20 At the outset, we note that this case comes before us on a somewhat unusual procedural
posture. After Jodi filed her amended complaint, and Mary filed her answer to Jodi’s complaint,
the circuit court heard arguments during a hearing on the amended complaint. The court then
granted the relief that Jodi sought in her amended complaint. In other words, the court granted
Jodi’s requested relief solely on the pleadings, memoranda, and exhibits. There was no trial, no
motion for summary judgment, and no written motion for judgment on the pleadings.
¶ 21 Nonetheless, we note that none of the parties objected to the manner in which the court
resolved the complaint, and they do not raise the issue in this court. In her brief, Jodi stated that
the parties agreed to a “bench hearing on the issue,” and it appears that the proceeding was in the
nature of a bench trial where all of the facts were uncontested. That being the case, the
proceedings below were the functional equivalent of a motion for judgment on the pleadings.
Therefore, absent any procedural objection from the parties (either here or in the court below),
we will review the judgments below as if the court had entered them on a motion for judgment
on the pleadings. “Judgment on the pleadings is properly granted if the pleadings disclose no
genuine issue of material fact and that the movant is entitled to judgment as a matter of law.”
Pekin Insurance Co. v. Wilson, 237 Ill. 2d 446, 455 (2010). Our review is de novo. Id.
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¶ 22 Mary first argues that the circuit court erred in imposing a constructive trust over the
survivor’s benefit payments to Mary and awarding 50% of those payments to Jodi. Mary again
contends that Jodi was not entitled to anything at all, because the benefits Mary received were
“survivor disability benefits,” which were not covered by the MSA.
¶ 23 Jodi’s and Ronald’s MSA was incorporated into the judgment of dissolution, so we must
construe those documents as a single agreement. See In re Marriage of Farrell & Howe, 2017
IL App (1st) 170611, ¶ 12 (citing In re Marriage of Frank, 2015 IL App (3d) 140292, ¶ 11). The
court imposed the constructive trust as a means of enforcing the terms of Donald’s and Jodi’s
marital settlement agreement. We construe an MSA in the same manner as a contract. Id. Our
primary objective is “to give effect to the purpose and intent of the parties at the time they
entered into the agreement.” In re Marriage of Schurtz, 382 Ill. App. 3d 1123, 1125 (2008). If
the terms of the agreement are unambiguous, we must give effect to that language. Id. By
contrast, if the agreement is ambiguous, i.e., where the language is susceptible to more than one
reasonable interpretation, a court may hear parol evidence to determine the parties’ intent. Id.;
but see Camp v. Hollis, 332 Ill. App. 60, 68 (1947) (noting that it is a well-settled rule that, if a
contract is susceptible of two constructions, the one that is “rational and probable” must be
preferred). We review a circuit court’s interpretation of a marital settlement agreement de novo.
Id.
¶ 24 Resolution of this issue hinges on the provision in Jodi and Ronald’s MSA granting Jodi
50% of Ronald’s benefits under the “City of Evanston Pension Plan.” “When a pension plan
provides disability benefits as well as retirement benefits and the marital settlement agreement
refers only to ‘retirement’ benefits and is silent as to disability payments, a court may reasonably
interpret the agreement in one of two ways: (1) as a grant to the ex-spouse of a portion of any
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benefits received under the pension plan, or (2) as limiting the ex-spouse’s interest in the pension
plan to normal, age-related retirement benefits.” (Emphasis in original.) Schurtz, 382 Ill. App.
3d at 1125 (citing In re Marriage of Davis, 286 Ill. App. 3d 1065, 1067 (1997)).
¶ 25 When a disabled ex-husband is not yet eligible for retirement pay, a marital settlement
agreement entitling the ex-wife to “retirement” benefits must not be interpreted to grant her a
share of her ex-husband’s disability income, because in this instance the disability pay does not
substitute for retirement benefits; rather, it merely replaces the ex-husband’s income. Id. at
1126. However, when an ex-husband is eligible for retirement pay but is receiving disability
income instead, a marital settlement agreement providing the ex-wife a portion of “retirement”
benefits can be reasonably interpreted “ ‘in only one way—the petitioner [should] be paid the
percentage of what would be the normal retirement benefits, whether respondent [is] paid normal
retirement benefits or disability retirement benefits.’ ” (Alterations in the original.) Id. (quoting
In re Marriage of Marshall, 166 Ill. App. 3d 954, 962 (1988)), appeal denied sub nom. Schurtz v.
Schurtz, 229 Ill. 2d 659 (2008). Thus, in this context, the label of the payments (as being for
disability or retirement) is not dispositive. Id.
¶ 26 A similar result was obtained in In re Marriage of Benson, 2015 IL App (4th) 140682.
There, the divorce judgment required the husband, a Decatur firefighter entitled to pension
benefits under Article 4 of the Code, to pay his ex-wife a portion of his “retirement plan.” Id. ¶
5. Nine years later, the husband was injured on the job and obtained a disability pension. He
refused to give his ex-wife a portion of those benefits, claiming they were disability, not
“retirement” benefits. The appellate court disagreed. It noted that the husband was old enough to
obtain a retirement pension. Then, citing Schurtz with approval, it explained: “While [the
husband’s] payments are considered disability benefits, they are essentially retirement benefits.
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Like the ex-husband in Schurtz, [the husband’s] disability benefits do not serve as income
replacement, but as a substitute for his retirement pension.” It thus concluded that the ex-wife
was entitled to a share of his benefit payments. Id. ¶ 32.
¶ 27 In this case, Ronald was already eligible for retirement pay when he was awarded
disability benefits. See 40 ILCS 5/4–109(a) (West 2018) (retirement eligibility at age 50). Due
to his illness, he could no longer work. He chose, however, to seek line-of-duty disability
payments instead of retirement benefits. The amount of Ronald’s disability pension was—at a
minimum—the same amount he would receive as a retirement benefit. See 40 ILCS 5/4–110
(West 2018) (disability pension is the greater of (1) 65% of monthly salary or (2) the retirement
pension that the firefighter would have been eligible to receive). Although the Fund paid
benefits to Mary as the surviving spouse of a disabled firefighter under section 4-114 of the Code
(40 ILCS 5/114 (West 2016)), those benefits were in substance retirement—not disability—
benefits. Ronald was eligible for retirement benefits when he could no longer work due to his
illness even though he applied for disability benefits. Therefore, under the rule expressed in
Schurtz and Benson, the circuit court correctly found that Jodi was entitled to 50% of these
payments. To hold otherwise would run contrary to the terms of the MSA, which “could hardly
have been the intention of the parties.” Marshall, 166 Ill. App. 3d at 962. Mary’s reliance on
Farrell & Howe on this point is misplaced. There, the court specifically distinguished Schurtz
and Benson on the basis that the husband had not reached retirement age and the underlying
marital settlement agreement was more specific with respect to the classification of benefits
subject to division. Farrell & Howe, 2017 IL App (1st) 170611 at ¶ 16.
¶ 28 Mary’s remaining arguments are that the court lacked the power to provide relief,
“equitable or otherwise,” and that Jodi both waived her right to disability benefits under the
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MSA and also sought an improper remedy (i.e., a constructive trust). Jodi responds that Mary
forfeited these arguments.
¶ 29 We agree that these arguments were never presented to the court below. As such, they
are forfeited. Under the doctrine of invited error, “a party cannot complain of error which that
party induced the court to make or to which that party consented.” Swope, 213 Ill. 2d at 217.
The rationale behind this doctrine is that “it would be manifestly unfair to allow a party a second
trial upon the basis of error which that party injected into the proceedings.” Id. Here, the record
reveals that, at the hearing on Jodi’s complaint, the circuit court explicitly asked about “the
equities” and noted that this case involved a constructive trust, unlike the Farrell & Howe
decision on which Mary’s counsel relied. Counsel, however, did not raise any issue with the
court’s equitable power, the propriety of a constructive trust as relief, or whether Jodi waived
any claim. Nor did Mary present these objections in her answer or memorandum of law below.
As a result, these claims are forfeited.
¶ 30 Moreover, it is “an elementary principle of law” that a court has the inherent power to
enforce its orders, and the circuit court retains jurisdiction to enforce domestic relations orders.
Smithberg v. Illinois Municipal Retirement Fund, 192 Ill. 2d 291, 297-98 (2000). In addition, a
court also retains its traditional equitable powers “[i]rrespective of empowering statutes.” Id. at
298. As the Smithberg court explained: “A constructive trust is created when a court declares
the party in possession of wrongfully acquired property the constructive trustee of that property
because it would be inequitable for that party to retain possession of it. The sole duty of the
constructive trustee is to transfer title and possession of the wrongfully acquired property to the
beneficiary.” Id. at 299. Accordingly, the circuit court’s decision to impose a constructive trust
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was an entirely appropriate remedy to enforce the MSA. Thus, for this additional reason, Mary’s
arguments are meritless.
¶ 31 Finally, we note that, Mary’s contentions of error are centered solely upon the September
6, 2018, order, which was listed in appeal number 1-18-2028. Mary’s notice of appeal in appeal
number 1-18-2706, however, lists not only the September 6, 2018, order, but also the circuit
court’s order of October 1, 2018 (modifying the September order with respect to the receiving
account for Mary’s payments to Jodi), and November 27, 2018 order (clarifying the amount
payable to Jodi and staying the judgment pending appeal). Mary does not raise any specific
argument with respect to either the October or November orders. We therefore affirm the circuit
court’s judgments on those orders, as well.
¶ 32 CONCLUSION
¶ 33 The circuit court did not err in granting the relief sought in Jodi’s amended complaint.
Accordingly, we affirm the judgment of the Circuit Court of Cook County.
¶ 34 Affirmed.
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