No. 2--02--0960

_________________________________________________________________

	IN THE

	APPELLATE COURT OF ILLINOIS

	SECOND DISTRICT

_________________________________________________________________

In re MARRIAGE OF	)	Appeal from the Circuit Court

EVERETT E. HULSTROM,	)	of Lee County.

	)

	Petitioner-Appellant,	)

	)

and	)	No. 94--D--90

	)

ILA J. HULSTROM,	)	Honorable

	)	David T. Fritts,

	Respondent-Appellee.	)	Judge, Presiding.

_________________________________________________________________

	JUSTICE BYRNE delivered the opinion of the court:

	Petitioner, Everett E. Hulstrom, appeals from the order of the

circuit court denying his petition to modify the judgment

dissolving the parties' marriage.  We reverse as void the portion

of the dissolution judgment dividing the marital property, and we

remand the cause with directions.

FACTS

	On August 19, 1994, the trial court dissolved the parties' 46-

year marriage and incorporated their marital settlement agreement

into the judgment.  At the time of the dissolution, petitioner and

respondent, Ila J. Hulstrom, were 67 and 65 years old,

respectively, and each was receiving social security benefits.  The

marital settlement agreement provides in relevant part:

	"1. The Social Security paid on behalf of [petitioner] and

[respondent] shall be combined monthly and paid to

[respondent], where, on the tenth of each month, one-half of the combined Social Security payment shall be deposited by

direct deposit from [respondent's] account into an account

designated by [petitioner].  To the extent that such Social

Security payments to either party are income, and to such an

extent that the party who receives the greater amount of

Social Security receives income from the party to whom the

greatest amount of Social Security is paid, that amount of

Social Security shall be income to the receiving party to the

extent that it was income to the paying party.

* * *

	8. To the fullest extent provided by law, each party waives

maintenance now and all times in the future."

	On May 24, 2002, petitioner petitioned to modify the portion

of the judgment allocating the social security benefits. 

Petitioner alleged that paragraph 1 of the settlement agreement

"purports to distribute a Social Security benefit as a property

right when, in fact and in law, it is a support matter." 

Petitioner alleged that the parties should no longer share their

social security benefits because (1) petitioner's income had

decreased significantly; (2) his medical expenses had increased due

to his failing health; (3) respondent had remarried and was

financially secure; and (4) paragraphs 1 and 8 of the settlement

agreement were inconsistent.

	At a hearing on the petition, petitioner testified to his

declining income and deteriorating health, including a form of

Parkinson's disease from which he suffers.  Petitioner and respondent had each remarried, but respondent did not notify

petitioner of her remarriage.

	On July 25, 2002, the trial court denied the petition to

modify the judgment, finding that the parties had followed the

settlement agreement for eight years and had never treated the

equal division of social security benefits as maintenance.  The

court concluded that respondent's remarriage would not end her

right to one-half of the couple's benefits because the parties had

viewed them as marital property.  The court emphasized that the

parties considered the equal division of benefits when dividing the

remaining marital assets.  The court denied petitioner's subsequent

motion to reconsider on August 30, 2002, and petitioner timely

appealed on September 4, 2002.

ANALYSIS

	On appeal, petitioner argues that the trial court erroneously

determined that the equal division of the parties' social security

benefits was an unmodifiable distribution of marital property,

rather than a modifiable maintenance obligation that terminated

automatically upon respondent's remarriage.  Petitioner presents

two theories on appeal: (1) because state trial courts lack

jurisdiction to order the division of social security benefits in

marriage dissolution cases, the marital settlement agreement

disposing of the parties' social security benefits may not be

enforced; and (2) even if the circuit court had jurisdiction over

the issue, the social security benefits qualify as "maintenance"

rather than "marital property" under the Illinois Marriage and Dissolution of Marriage Act (Marriage Act) (see 750 ILCS 5/503(a),

504(a) (West 2000)).

	Respondent alternatively contends that (1) the agreement's

social security provision is a valid allocation of marital property

rather than a description of petitioner's prospective maintenance

obligation and (2) if this court decides that the provision is

invalid, a new hearing is necessary for the redistribution of the

marital assets.

	The issue of whether a state trial court lacks jurisdiction to

enforce the provision of a marital settlement agreement dividing

social security benefits is a question of first impression in

Illinois.  However, two other jurisdictions have ruled that a

settlement agreement dividing such benefits as marital property is

void for violating the anti-alienation provision of the Social

Security Act (42 U.S.C. §407(a) (2000)).  Gentry v. Gentry, 327 Ark. 266, 938 S.W.2d 231 (1997); Boulter v. Boulter, 113 Nev. 74, 930 P.2d 112 (1997).  We find these cases to be persuasive and directly on point.

	It is well settled that, under the supremacy clause of the

United States Constitution, a federal law preempts a conflicting

state law and the state law is nullified to the extent that it

actually conflicts with federal law.  U.S. Const., art. VI; In re Marriage of Wiseman, 316 Ill. App. 3d 631, 637 (2000).

	Section 407(a) of the Social Security Act provides as follows:

		"(a) The right of any person to any future payment under

this subchapter shall not be transferrable or assignable, at

law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to

execution, levy, attachment, garnishment, or other legal

process, or to the operation of any bankruptcy or insolvency

law."  42 U.S.C. §407(a) (2000).

	The Supreme Court has stated that section 407(a) imposes "a

broad bar against the use of any legal process to reach all social

security benefits."  Philpott v. Essex County Welfare Board, 409 U.S. 413, 417, 34 L. Ed. 2d 608, 612,  93 S. Ct. 590, 592 (1973). 

In Philpott, the Court held that section 407(a) of the Social Security Act, which prohibits the use of "any legal process" to

reach "social security benefits," bars all claimants, including a

state.  Philpott, 409 U.S. at 417, 34 L. Ed. 2d at 612, 93 S. Ct. at 592.

	In Hisquierdo v. Hisquierdo, 439 U.S. 572, 59 L. Ed. 2d 1, 99 S. Ct. 802 (1979), the Court interpreted section 231m(a) of the

Railroad Retirement Act of 1974 (45 U.S.C. §231m(a) (1976)), which

is virtually identical to section 407(a) of the Social Security

Act.    The statute at issue in Hisquierdo provided that, "notwithstanding any other law of the United States, or of any

State, territory, or the District of Columbia, no annuity or

supplemental annuity shall be assignable or be subject to any tax

or to garnishment, attachment, or to other legal process under any

circumstances whatsoever, nor shall the payment thereof be

anticipated."  45 U.S.C. §231m(a) (1976).  The Court stated that,

by enacting such anti-assignment statutes, Congress has "afforded

recipients [protection] from creditors, taxgatherers, and all those who would 'anticipate' the receipt of benefits."  Hisquierdo, 439 U.S. at 575-76, 59 L. Ed. 2d at 7, 99 S. Ct. at 805.

	In Boulter, the trial court dissolved the parties' 37-year marriage and incorporated a property settlement agreement into the

judgment of dissolution.  Pursuant to paragraph 4E of the

agreement, the parties agreed to pool and divide equally the social

security benefits accrued during the marriage.  Boulter, 113 Nev. at 75, 930 P.2d at 113.  When the husband turned 65 years old, he

refused to apply for social security benefits, and the wife moved

to enforce the agreement.  The trial court granted the wife's

motion, and the husband appealed.

	Relying upon Philpott and Hisquierdo, the Nevada Supreme Court held that the trial court's incorporation of the property

settlement agreement into the divorce decree qualified as state

action that had been preempted by section 407(a) of the Social

Security Act.  The Boulter court also quoted with approval the Illinois Appellate Court, which had stated that " ' "[t]he [Social

Security Act], consistent with its remedial purpose, provides for

the various contingencies of life including the dissolution of

marriage.  Since the statute itself provides for the equitable

distribution of its benefits to *** divorced spouses, *** we will

not disturb the statutory scheme by suggesting any award of any part of the actual social security retirement benefits to which

respondent may be entitled upon his reaching retirement age." ' " 

(Emphasis added.)  Boulter, 113 Nev. at 77, 930 P.2d at 113 quoting, In re Marriage of Hawkins, 160 Ill. App. 3d 71, 77-78 (1987), quoting In re Marriage of Evans, 85 Ill. App. 3d 260, 263 (1980), rev'd on other grounds, 85 Ill. 2d 523 (1981).

	The Boulter court then ruled that, "[b]ecause the [trial] court was without power to take any action regarding the parties'

social security benefits, paragraph 4E [the settlement provision

dividing the accrued but unpaid social security benefits] was not

properly incorporated into the divorce decree.  Accordingly, this

court may not sustain the district court order enforcing paragraph

4E of the decree."  Boulter, 113 Nev. at 78, 930 P.2d. at 114.

	The wife alternatively asserted that the voluntary nature of

the settlement agreement obligated the husband to pay one-half of

his social security benefits.  In rejecting the wife's argument,

the Boulter court held that Congress's clear intent in enacting section 407(a) required the court to "strictly interpret that

clause to prohibit voluntary as well as involuntary transfers or

assignments."  Boulter, 113 Nev. at 78, 930 P.2d at 114-15.  The court noted:

		"Although social security recipients may use the proceeds

of their social security, after their receipt, to satisfy

preexisting obligations [(United States v. Eggen, 984 F.2d 848 (7th Cir. 1993))], they may not contract to transfer their

unpaid social security benefits.  Thus, in contracting to give

[the wife] one-half of his benefits before he was eligible to

receive them, [the husband] ineffectually 'transferred his

right' to the benefits.  Because [the husband] and [the wife]

attempted to transfer their rights to future benefits in

violation of [section 407(a)], the agreement was invalid and neither this court nor the district court may order its

enforcement."  Boulter, 113 Nev. at 78, 930 P.2d at 114.

	Under similar facts, the Arkansas Supreme Court reached the

same result in Gentry.  In that case, the parties entered into a martial settlement agreement that provided, "[i]n the event that

the husband is entitled to Social Security payments, the wife shall

be entitled and shall receive one-half of all payments that are

made to him."  Gentry, 327 Ark. at 267, 938 S.W.2d at 232.  The husband declined to pay one-half of his benefits when he began

receiving them, and the wife filed a petition for a citation of

contempt to enforce the agreement.  The trial court granted the

petition, ruling that the husband owed one-half of both his paid

and unpaid benefits.

	Citing Philpott, Hisquierdo, and Boulter, the Arkansas Supreme Court held that "state courts are without power to take any action

to enforce a private agreement dividing future payments of Social

Security when such an agreement violates the [section 407(a)]

statutory prohibition against transfer or assignment of future

benefits."  Gentry, 327 Ark. at 269, 938 S.W.2d at 232.

	The Gentry court noted that Congress had created a statutory exception to the anti-alienation provision of section 407(a) when

it enacted section 659(a) of the Social Security Act in 1975. 

Gentry, 327 Ark. at 270, 938 S.W.2d at 233.  Section 659(a) makes benefits subject "to legal process *** to provide child support or

make alimony payments."  42 U.S.C. §659(a) (2000).  However,

Congress specifically excluded from its definition of alimony any

community-property settlement, equitable distribution of property, or other division of property between spouses.  42 U.S.C. §662(c)

(2000). Gentry adopted the Rhode Island Supreme Court's interpretation of these sections in stating, " 'Social Security

benefits may be reached by a former spouse for alimony or child

support but not for property division.' "  Gentry, 327 Ark. at 270, 938 S.W.2d at 233, quoting Kirk v. Kirk, 577 A.2d 976, 980 (R.I. 1990).  We agree with the Arkansas and Rhode Island courts'

interpretation of these sections of the Act.

	Therefore, in this case, the section 659(a) alimony exception

to the anti-alienation rule of section 407(a) would render the

settlement agreement's purported division of social security

benefits valid only if the parties intended the transfer to be

maintenance rather than a property division.  See Gentry, 327 Ark. at 270, 938 S.W.2d at 233; Kirk, 577 A.2d at 980.  The child support exception does not apply here because the parties' children

are emancipated.  Therefore, we must next determine the meaning of

paragraph 1 of the agreement.

	Interpreting a marital settlement agreement is a matter of

contract construction; the court seeks to effectuate the parties'

intent.  In re Marriage of Agustsson, 223 Ill. App. 3d 510, 518 (1992).  Ordinarily, the language the parties use is the best

indication of their intent.  In re Marriage of Frain, 258 Ill. App. 3d 475, 478 (1994).  When contract terminology is unambiguous, it

must be given its plain and ordinary meaning.  Frain, 258 Ill. App. 3d at 478.  However, where the language is ambiguous, the trial

court may receive parol evidence to decide what the parties

intended.  Pepper Construction Co. v. Transcontinental Insurance Co., 285 Ill. App. 3d 573, 576 (1996).  Whether an agreement is ambiguous is a question of law.  In re Marriage of Wenc, 294 Ill. App. 3d 239, 243 (1998); Pepper Construction Co., 285 Ill. App. 3d at 575-76.

	We agree with the trial court that the parties treated the

social security benefits as marital property rather than

maintenance.  Paragraph 1 of the settlement agreement sets forth a

procedure for pooling and dividing the benefits, and paragraphs 2

through 7 allocate assets that undisputedly qualify as marital

property, including the marital residence, rental property, lawn

mowers, automobiles, bicycles, tools, and checking and savings

accounts.  Paragraph 8 provides that the parties waive any claims

to prospective maintenance.  If we were to conclude that the

division of the social security benefits qualified as maintenance,

paragraph 1 would directly contradict paragraph 8.  The parties did

not expressly identify the social security benefits as marital

property, but such an interpretation reconciles paragraphs 1 and 8.

	We conclude that the plain meaning of the unambiguous language

of the settlement agreement indicates that the parties intended the

social security benefits to be marital property rather than

maintenance.  Therefore, we conclude that the anti-alienation rule

of section 407(a) of the Social Security Act invalidates the

agreement provision purporting to pool and divide equally the

parties' future social security payments.  Parenthetically, we note

that section 407(a) prohibits the transfer of the right of any

person to future payment of social security benefits, including

"moneys paid or payable" under the Act.  Therefore, section 407(a) applies equally to cases like Boulter and Gentry, where fewer than both parties had begun receiving benefits at the time of the

dissolution, and this case, where both parties were receiving

benefits when they entered into the agreement.

	Respondent next contends that, even if the settlement

agreement was incorporated into the judgment in error, we should

nevertheless enforce it because it is merely voidable and not void,

and therefore not subject to petitioner's collateral attack.  We

disagree.

	The doctrine of res judicata, or estoppel by judgment, holds that " 'a final judgment rendered by a court of competent

jurisdiction on the merits is conclusive as to the rights of the

parties and their privies, and as to them, it constitutes an

absolute bar to a subsequent action involving the same claim,

demand or cause of action.' "  Miller v. Balfour, 303 Ill. App. 3d 209, 214-15 (1999), quoting Sobina v. Busby, 62 Ill. App. 2d 1, 17 (1965).

	However, the doctrine of res judicata does not apply where a judgment is void, and void judgments are subject to collateral

attack for lack of jurisdiction or fraud.  Jurisdiction involves

not only the power to hear and determine a given case but also the

power to grant the particular relief requested, and every act of

the court beyond its jurisdiction is void.  Miller, 303 Ill. App. 3d at 215.  A voidable judgment is one entered erroneously by a

court having jurisdiction and is not subject to collateral attack. 

People v. Davis, 156 Ill. 2d 149, 155-56 (1993).  Petitioner's action is a collateral attack on the judgment because it is an attempt to impeach the judgment in an action other than that in

which the judgment was entered.  See Juszczyk v. Flores, 334 Ill. App. 3d 122, 126 (2002).

	Our supreme court discussed the legal distinction between 

void and voidable judgments in In re Marriage of Mitchell, 181 Ill. 2d 169 (1998).  In Mitchell, the parties entered into a marital settlement agreement, which set forth the husband's child support

obligation in terms of a percentage of income, rather than an exact

dollar amount as required by the applicable statute.  Pursuant to

the agreement, the parties revisited the child support issue

annually.  Mitchell, 181 Ill. 2d at 171.  Six years later, at a hearing on another issue, the trial court sua sponte modified the  child support award after concluding that it was void and

unenforceable for violating the statute.  The wife appealed.

	On appeal, the husband argued that the trial court lost its

jurisdiction by entering the judgment and subsequent orders that

expressed the child support award in terms of a percentage of his

income.  The supreme court agreed that the trial court had erred. 

However, the supreme court cited the traditional rule that "[o]nce

a court has acquired jurisdiction, an order will not be rendered

void merely because of an error or impropriety in the issuing

court's determination of the law."  Mitchell, 181 Ill. 2d at 174. Acknowledging that a judgment may be attacked collaterally as void

if there is a total lack of jurisdiction, the Mitchell court held that the erroneous child support determination was merely voidable,

and not void, because the trial court had subject matter jurisdiction over the parties, the dissolution proceedings, and the

child support award.  Mitchell, 181 Ill. 2d at 175.

	The Mitchell court also addressed the related issue of whether the trial court's subject matter jurisdiction was defective under 

the Restatement (Second) of Judgments.  Mitchell, 181 Ill. 2d at 175.  Section 12 of the Restatement addresses the res judicata effect of a judgment on an alleged defect in the subject matter

jurisdiction of the court rendering the judgment.  Section 12 of

the Restatement provides as follows:

		"When a court has rendered a judgment in a contested

action, the judgment precludes the parties from litigating the

question of the court's subject matter jurisdiction in

subsequent litigation except if:

		(1) The subject matter of the action was so plainly

beyond the court's jurisdiction that its entertaining the

action was a manifest abuse of authority; or 

		(2) Allowing the judgment to stand would substantially infringe the authority of another tribunal or agency of

government; or 

		(3) The judgment was rendered by a court lacking

capability to make an adequately informed determination of a

question concerning its own jurisdiction and as a matter of

procedural fairness the party seeking to avoid the judgment

should have opportunity belatedly to attack the court's

subject matter jurisdiction."  (Emphasis added.)  Restatement

(Second) of Judgments §12 (1982).

	Applying these criteria, the Mitchell court again concluded that the contested child support order was voidable rather than

void, and hence not subject to collateral attack.  The court thus

decided that, even if the defect in the child support order

pertained to subject matter jurisdiction, section 12 of the

Restatement would preclude a collateral attack on the order. 

Mitchell, 181 Ill. 2d at 176.

	As in Mitchell, the parties in this case had the opportunity to bargain for, and to benefit from, the terms of the settlement

agreement, including the division of prospective social security

benefits.  The trial court had jurisdiction over the parties and

the dissolution proceeding in general, and the court also had the

authority to incorporate a marital settlement agreement into the

judgment.  However, this case is otherwise distinguishable from

Mitchell.

	In Mitchell, the Marriage Act authorized the trial court to enter the child support order; but in this case, the property

division section of the Marriage Act is preempted by the Social

Security Act, which bars the transfer of social security benefits. 

Because the trial court in this case lacked jurisdiction to divide

the parties' social security benefits, the traditional rule

governing void and voidable judgments, as restated in Mitchell, indicates that the portion of the judgment allocating the marital

property is void.

	This conclusion is supported by an analysis of section 12 of

the Restatement, which the Mitchell court cited with approval but declined to adopt expressly.  Mitchell, 181 Ill. 2d at 177.  The marital property division " 'substantially infringe[s] the

authority of another tribunal or agency of government,' " in this

case, the federal government.  Mitchell, 181 Ill. 2d at 176, quoting Restatement (Second) of Judgments §12 (1982).  We conclude

that the portion of the judgment incorporating the settlement

agreement is void rather than voidable.  We emphasize that the

remainder of the judgment is valid.

	After concluding that the trial courts lacked jurisdiction to

enforce the agreements dividing the parties' social security

benefits, the supreme courts in Boulter and Gentry reversed the judgments and remanded the causes for further proceedings.  Gentry, 327 Ark. at 271, 938 S.W.2d at 233; Boulter, 113 Nev. at 80, 930 P.2d at 115.  In Boulter, the Nevada Supreme Court expressly directed the trial court to reconsider the property distribution. 

Boulter, 113 Nev. at 80, 930 P.2d at 115.  We conclude that a similar reversal and remand is appropriate here.

	We reject respondent's argument that we must enforce the

erroneous property division because the parties have relied upon it

since the marriage was dissolved in August 1994.  The doctrine of

equitable estoppel does not preclude petitioner from attacking the

validity of the marital property division because it is void. 

Equitable estoppel arises when a party, by his words or conduct,

intentionally or through culpable negligence, induces reasonable

reliance by another on his representations and thus leads the

other, as a result of that reliance, to change his position to his

detriment.  In re Marriage of Schlam, 271 Ill. App. 3d 788, 794 (1995).  In Schlam, this court held that the wife was equitably estopped from asserting that the trial court lacked subject matter

jurisdiction to enter a settlement agreement regarding child

support.  However, Schlam is distinguishable from this case, where the division of social security benefits implicates the supremacy

clause and the Social Security Act.

	We note that the related doctrine of estoppel by remarriage

also does not apply here.  The rule provides that parties to a

dissolution proceeding may be estopped from asserting that the

trial court lacked either personal or subject matter jurisdiction. 

It has long been held in Illinois that the acceptance of benefits

of a dissolution judgment may "estop" a party from subsequently 

challenging the validity of that judgment.  See, e.g., Schlam, 271 Ill. App. 3d at 793.  Estoppel by remarriage is distinct from

traditional notions of equitable estoppel, and the party supporting

the enforcement of the dissolution judgment need not prove his or

her detrimental reliance upon the judgment.  Schlam, 271 Ill. App. 3d at 793.  The rule does not apply here because (1) petitioner

does not assert that the entire dissolution judgment is void and (2) the dissolution of the parties' marriage does not draw its

validity from the property division.  See Schlam, 271 Ill. App. 3d at 794.

	In conclusion, we hold, in agreement with Boulter and Gentry, that a state courts lacks jurisdiction to enforce a marital

settlement agreement that divides future payments of social

security when such an agreement violates section 407(a) of the

Social Security Act, which statutorily prohibits the transfer or

assignment of future benefits.  Because the marital settlement agreement in this case transferred the parties' future social

security payments as marital property rather than as maintenance or

child support, the portion of the judgment dividing the marital

assets is void for violating section 407(a) of the Social Security

Act and the trial court lacked jurisdiction to enforce it.

	The trial court generally had jurisdiction over the parties

and the dissolution proceedings, but the trial court's

incorporation of the defective settlement agreement into the

judgment is void for lack of subject matter jurisdiction over the

social security benefits.  In this case, the doctrines of res judicata, equitable estoppel, and estoppel by remarriage do not bar petitioner's challenge to the marital property division.

	On remand, we direct the trial court to reconsider all of the

marital settlement issues consistent with the Marriage Act and this

opinion.  We acknowledge that the passage of time and the parties'

adherence to the original defective judgment will complicate an

equitable division of the marital property, but we conclude that a

remand is nevertheless necessary because the original property

division iwas void and an affirmance would perpetuate the error

contrary to the mandate of the Social Security Act.

	Finally, the parties' use and consumption of the marital

property during the past eight years would make a redistribution of

the entire marital estate nearly unworkable.  To avoid this

dilemma, the parties may decide to renegotiate the division of

prospective social security benefits by characterizing them as

maintenance (see Gentry, 327 Ark. at 270, 938 S.W.2d at 233) and leaving the remainder of the judgment undisturbed.  However, the parties have remarried, and section 510(c) of the Marriage Act

provides that the obligation to pay maintenance ordinarily

terminates upon the remarriage of the party receiving maintenance. 

See 750 ILCS 5/510(c) (West 2000).  Therefore, the parties would be

required to draft "a written agreement set forth in the judgment or

otherwise approved by the court" if they wish to devise a

prospective maintenance schedule regarding the benefits.  See 750

ILCS 5/510(c) (West 2000).  Such an agreement should also consider

the tax implications raised by an award of maintenance.  See 750

ILCS 5/504(a)(9) (West 2000).

	We further note that, if the parties cannot reach agreement on

remand, the trial court may consider the parties' accrued but

unpaid social security benefits when redistributing all of the

marital assets equitably.  See generally In re Marriage of Crook, 334 Ill. App. 3d 377, 384-85 (2002), citing In re Marriage of Boyer, 538 N.W.2d 293, 296 (Iowa 1995).

	For the preceding reasons, the portion of the judgment

dividing the parties' marital property is reversed and the cause is

remanded with directions.

	Reversed and remanded with directions.

	HUTCHINSON, P.J., and KAPALA, J., concur.