No. 2--07--0387 Filed: 5-1-08

______________________________________________________________________________ IN THE APPELLA

TE COURT

OF ILLINO IS SECOND DISTRICT

______________________________________________________________________________ In re MARRIAGE OF SUZANNE ) Appeal fro m the Circ uit Court GULLA, f

/k/a Suzanne Kanaval, ) of Lake County. ) Petitioner- Appellee, ) ) and ) No. 94--D- -8 ) STEPHEN KANAVAL, ) ) Respondent ) Honorable ) Joseph R. Waldeck, (Knobias, I

nc., Appellant). ) Judge, Presiding.

______________________________________________________________________________ JUSTICE G

ILLERAN

JOHNSON

delivered th

e opinion of

the court: The appellant, K

nobias, Inc ., appeals f

rom the tri al court's j udgment o rderin g it to p ay $369,000 to the petitio ner, Suzanne Gulla, as a p enalty for k nowingly f

ailing to pay , within sev en business days, child

support fro m the wage s of its em ployee , the respondent , Stephen K anaval. Knobias r aises nume rous cont entions o f error on appeal. We affirm. Stephen and Suzanne's marri age was diss olved on Jul y 19, 1994. At that tim

e, Stephen w as ordered to pay $5,000 per month

in unallocat

ed mainten ance and child support for the couple's two children. On May 6, 1998, an agreed order was entered requiring Stephen to pay Suzanne $4,000 per month for child support only. O n April 30, 2004, an agreed order was entered against Stephen for $123,14 0.63 in chil d support arrearage. The order indica ted that Step

hen's chil d support ob ligation had terminated as ofNo. 2--07--0387

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June 2003. Stephen

was ordered

to pay $3,0 00 per mon

th until the o

rder for arre arage was pa

id in full. On March, 1 5, 2005, su bsequent to

Stephen' s unemplo yment, th e trial court e

ntered an ord

er deferring Stephen's obligations to pay the arrearage until he was ree mployed. On March 20, 20 06, subseq uent to Stephen' s employm ent with Knobias in Mississippi, the trial court entere d an order requ iring Stephen to resum

e payment

of $3,000

per month towards the arrearage. That

same day, the trial cou

rt issued a no tice to Knob ias to withh old incom e for suppo

rt. The notice direc ted Knobiasto withhold $3,000 per

month fr om Stephe

n's pay. K

nobias was served withthis notice on March 28, 2006, by certifie d mail, ret urn receipt r

equested. T

he notice inc luded the follow ing provisio ns:

" Under Illinois law, you must begin withholding no later than the next payment of income to the employee/obligor that occurs 14 business days after the date of this Notice. You must send the amount withheld to the paye e within 7 bus iness days o f the pay da te. You are entitled to deduct a fee for your actual cost not to exceed $5 .00 month ly to defray

the cost of withholding. The total withheld amount, including your fee, cannot exceed the amount permitted under the Fe deral Consu mer Credit Act. * * * Withholding Limits: No employer/ payor sha ll withho ld income in the excess of the lesser of th e following amounts: *** the amounts allowed by the state of the employee's/obligor's principal place of employment." (Emphasis in original.) The notice further provided the phone and fax numbers of Suzanne's attor ney as w ell as the attorney's e-mail address. On October 16, 2006, the tr ial court gra

nted Suzann

e leav e to file a petition f or a rule to show cause again st

K nobias. Suzanne filed that petition on November 27, 2006. The petitionNo. 2--07--0387

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alleged that Knobias ha

d refused to f

orward the f

unds from

Stephen' s pay to the Illinois State Disbursement

Unit. The petitio n further alleged that Knob ias's refusal to forward

the funds w as an intentional , willful, and contum acious viola

tion of the t

rial court' s March 20, 2 006, order. On Dec ember 4, 2006, Knobias filed a limited response to the petition for a rule to show cause, pursuant to section 2--301 of the Code of Civil Procedure (735 ILCS 5/2--301 (W est 2006)). The response asserted that the trial court lacke d jurisdiction over Knobias and that the petition should therefore b e dismisse d. On Decem ber 15, 200 6, followin g a h earing, the trial court found that it had ju

risdiction o ver Knobias
. On January 3, 2007, Knobias filed a second resp onse to the p etition for a rule to show

cause, asking that the trial court find that it had acted in good faith t o comply with the noticeto withhold inc ome. Knobia s made the following assertions. On March 29, 2006, Martin J. Waitzman, Stephen' s attorney, informed Knobias tha

the would f

ile a motio n to vacate th

e trial court' s March 20, 2006, order. Waitzman further indicated that Joseph Poell, Suzanne's attorney, did not intend to contest the motion to vacate. On April 5, 200 6, Waitzm an inform ed Knobias that the part

ies had settled the issue and

that Stephe

n would make payments through ExpertPay. On October 31, 2006, after receiving notice of the petition for a rule to show cause, Kno bias inform

ed Poell tha

t it would withhold 50% of Stephen's monthly net income of $2,244.16. Fifty percent to be withheld from Stephen's pay check was the maximum allowed by federal and Mississippi law. Poell insisted, however, that Stephen's entire paycheck be withheld. Kn ob ias subsequently withheld 50% of Stephen's income in November and December 2006, totaling $2,805.20, and forwarded that to the Illinois State Disbursem

ent Unit. In

support of

its response , Knobias attached the affidavit of its inhouse counsel, Kristen Hendrix.No. 2--07--0387

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On February 5, 2007, the tr ial court ent

ered a judgm

ent against K

nobias for fai ling to withhold Stephen's income. The trial court f ound that the March 20, 2 006, order h ad been prop erly
e ntered and served a

nd that no su

bsequent or

der was ente

red modif ying the inc ome-w ithholdin g notice. As Knobias did not withhold any income until November 3, 2006, a $10 0-per-day p enalty
was assessed against it. Knobias was ordered to pay $7,854.56 as the amount that it shoul d hav e withheld from Ste phen's inc ome. A he aring date of February 26 , 2007, wasset to deter m ine the amount of

the penalty t

hat would b e imposed

against Kno

bias. On February 15 , 2007, Kn obias filed a motion to

reconsider. In its moti on, Knobia s asserted that the trial court' s March 20, 2 006, order w as void beca use the am

ount ordere d withheld e

xceeded Stephen's net in come. Th e o rder also vio lated feder al and Missis sippi law, w hich prohib its withholding more than

50% of one's n

et income. Knobias m

aintained th at it had reas onably relie d
on St ephen's attorney's representation that the March 20, 2006, order would be vacate d. Knobia s further argued that, because Suzanne had not filed her petition for a rule to show cause until s even months after the Ma

rch 20, 200 6, order, sh

e was barred

by th e doct

rine of laches from seek

ing to impose pe

nalties agai nst Knobias . Knobias a dditionally

asserted tha

tthe statute subjecting it to a penaltyfor not wit

hholding income was u nconstituti onal becaus e the pen alty was totally disproportionate to the violation being punished. On February 26 , 2007, the trial court de

nied Knobi as's mot

ion to reconsider. The trial cou rt
a lso set as $16 8,000 the p enalty that K nobias owe d for faili ng to comp ly with the incomewi thholding not ice. After S uzanne file d a motion to modif y the penalty

amount, t

he trial cour

t entered an order that

modified the p enalty again st Knobias t o $369,000 . Knobias th

ereafter fi led a timely no tice of appe al.No. 2--07--0387

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Knobias raises numerous contentions on appeal. Knobias's primary argument seems to be that, based on the

circumsta

nces, it was i ne quitable to f ind that Kno

bias knowingly failed t

o with holdthe amo unt designated in the income-withholding notice. Knobias emphasizes that the noticeordered more money to be withheld fr om Stephe n's pay tha

n he was m aking on a m

onthly basis. Knobias the

refore argues that it was impossible to comply with the trial court's order. Upon receiving the notice, Knobias maintains, it reasonably relied on Stephen's attorney's repres entation that the dispute b etween Suz anne and Ste phen had be en resolved . Knobias a sserts that, immedia tely upon notification that the matter had not been resolved, income was withheld. Se ction 35(a) of the

Income W

ithholding

for Suppo

rt Act (Wit

hholding A ct) ( 750 ILC S 28/35(a) (West 200 6)) sets forth the obligations of employers, like Knobias, th at have been served with an inco me-withh olding noti ce, and it sta tes in releva

nt part: "It shall be the d

uty of any payor

who has been served with an income withholding noticeto deduct an

y pay over income as provided in this Section . The payor

shall deduc t the amount designated in the income withholding notice, *** beginning no later than the nextp ayment of inc ome which is payable or creditable to the obligor that occurs 14 days following the date the income withholdin g notice wasmailed ***. *** Th

e payor shal l pay the amount withheld to the State Disbursement Unit within 7 business da ys after the date the
amou nt would (b ut for the duty to withhold income) have been paid or credited to the obligor. If the payor knowing ly fails to withhold the amount designat ed in the i ncome withholding notice or to p ay any amo unt withhel d to the State

Disbursem

ent Unit within 7 business days after

the date the am

ount would

have been pa

id or credite d to the oblig or, then the payor shall pay a penalty of $100 for each day t hat the a mount desi gnated in the income withholding notice (whe ther or not w ithheld by th e payor) is not paid to th e StateNo. 2--07--0387

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Disbursement

Unit after t

he period of

7 business d ays has expi red. The fa

ilure of a pa

yor,
on more than one occasion, to pay amounts withheld to the State Disbursem ent Unit wit

hin 7 bus iness days a

fter the dat

e the amou

nt would ha

ve been paid

or credited t

o the oblig o r creates a presumption that the payor knowingly failed to pay over the amounts. This penalt y may be collected

in a civil acti on which

may be brought against the payor in favor of the obligee or public office. *** For purposes of this Act, a w ithheld am

ount shall be consider

ed paid by a payor on the date it is mailed by the payor ***." 750 ILCS 28/35(a) (W est 2006). In this case, our standard

of review i s twofold. In reviewin g the legal ef fect of un disputed facts, ou r review is de novo . In re Marriage of Chen , 354 Ill. App. 3d 1004, 1011 (2004). The review of a trial court's interpretation of a statute is also de novo . Grams v. Autozone, Inc. , 319 Ill. App. 3d 567, 569(2001). Ho wever, the t rial court wa s the trier of

fact; thus, we will not disturb its findings of fact unless they are against the manifest weight of the evidence. Chen , 354 Ill. App. 3d at 1011. Despite Knobias's argument to the contrary, the record reveals that the income-withholding noticewas sent by certified mail, return receipt requested, as required by the Withholding Act (750 ILCS 28/20(g) (W

est 2006)) and that

it was receiv ed. Further

more, the noticesufficien

tly compli ed withthe Withh olding Act i n that it inf orm ed K nobias of its obligation to withhold income from St ephen's pay and whe

re to send tha

t income. The notice e

xplained th at, if the amount to b e withheld exceeded the amount allow ed by the law of its state, Knobias should withhold only the amount allowed by i

ts state. Kn obias was al so directed t o contact Su zanne's at

torney if it had any questions re garding the

notice. Despite this suffi cient notice , Knobias failed to withhold any of Stephen's income. Although the record revea

ls that Knobias realized that the maximum amount that it could withhold was 50%No. 2--07--0387

-7-

of Stephen' s net

income, it did not wit

hhold that amount until it received notice of Suzanne's petition for a rule to s how cause . Further more, alth ough the n otice di rected Kn obias to c ontact Su zanne's attorney i f it had any

questions re garding the

notice, it di d not. Base d on the clari ty of the no ti c e and Knobias' s failure to adhere to its ter ms, K nobias cannot rebut the presumption in the Withholding Act that it kn owingly fa iled to pay o ver the amo

unts that it

was obligated to. Thus, the trial court properly assessed a penalty against Knobias for its knowing viol ation of the Withholding Act. In so ruling, we note that Knobias argues that the penalty could be imposed only on t he amount that it withheld and failed toforward. Relying on Thomas v . Diener , 351 Ill. App. 3d 645, 650 (2004), Kn obias conte nds that the penalty d

oes not appl

y to an emp loyer who f

ailed to withhold altogether. In making

this argum

ent, Knobi as overlooks t

hat the Wit

hholding A ct was amended i n 2003. See Pub. A ct 93--294, §5, eff. J anuary 1, 20 04. This amendm ent provide d that if

the "payor knowingly

fails to withhold th

e amount d

esignated in

the incom

e withholdi ng notice

*** then the payorshall pay a penalty of $100 for each day that the *** amount des ignated i n the inco me withholding notice(whether or not withhel d by the payo r) is not paid. (Emphasis on language th at
was added.) Pub. Act 93--294, §5, eff . Jan uary 1, 2004. Thus, Knobias's reliance on Thomas is misplaced

and its argum

ent is without merit. We also reject K

nobias's a rgument th at, because

it was a Missi ssippi corpor ation that ha d
no contacts with Illinois, the t rial court lacked jurisdiction over it. Secti on 666(a)(9)(B) of the United States Code (42 U.S.C. §666(a)(9)(B) (2000 )) requires that each state grant full faith and credit to the child support wi thholding pro cedures of any other state. Section 93--25--67 of the Mississippi

Code provi des:No. 2--07--0387

-8- "An income-withhol ding order issued in another st

ate may be

sent by or on

behalf of the obligee, or by the sup port enforc ement age

ncy to the person d

efined as the obli gor's employer under §§93--11--101 through 93--11--119, without first filing a petition or comparab le pleading or

registering

the order with a tribunal

of this state." Miss. Code Ann. §93--25--6 7 (West 20 06). The Mississippi

Code furth

er provides t

hat "[t]he employer shall treat an

income-w ithholding

order issued in another st

ate which ap

pears regula

r on its face

as if it had bee

n issued by a t

ribunal of t

his state." Miss. Code Ann. §93--25--69 (West 2006). Based on both the United States Code and the Mississippi Code, the trial court properly deter mined that it had jurisdiction. We also note tha t Knobias ar g ues that (1) the trial court erred in not conduct ing a hearing
on the reasonablen

ess of ordering Knobias to withhold $3,000 a month from Stephen's income; (2) Suzanne should be barred by the doctrine of laches from reco vering such a large penal

ty against it ; and (3) the Withholding Act is unconstitutional. We will not consider Knobias's cont enti on as to the lack of a hearing on the reasonableness of the amoun t to be withh el d from St ephen's in

come, because that issue w as not raised below. See H audrich v. Howmedi ca, Inc. , 169 Ill. 2d 525, 536 (1996) (issues not raised in the trial court are dee med waived and may not be r aised for the first time
on appeal). W

e will also no t consider

Knobias' s argumen

t as to laches , because it c ites no autho rity for the applicab ility of tha

tdoctrine. S ee In re Marriage of Hinden

burg , 227 Ill. App. 3d 228, 232 (1992) (argu

ments not supported b y relevant le gal authorit y are waived

). As to Knobias's constitutional argument, Suzanne argues that Knobias is barred from raising this issue, beca

use it faile d to timely notify th e Attorne y General pursuant to Supreme Court Rule 19 (210 Ill. 2d

R. 19) that it wanted to c hallenge the constitutio nality of a s tatute. Kno bias has fil ed
a motion in

this court, e

ntitled "Moti on to Appro ve Appellan t's Federa l Expre ssing Its Bri ef toNo. 2--07--0387

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Attorney General O n Augu st 31, 2007 As Complying with Supreme Court Rule 19 or In The Alternative for

Leave Insta

nter to Have

This Motion

As Notice

Pursuant to Supreme Court Rule 19 to the Attorney General." This motion was ordered taken with the case, and we now grant the motion.That

being determ

ined, we find Knobias 's attack on the const

itutionality

of the Withholding Act to be without merit. Knobias argue s that the sta tute is uncon stitutional

because the

penalty is totally disproportionate to the violation being punished. This argument was recent ly considered and rejected by our supreme court in In re Marriage of Miller , 227 Ill. 2d

185, 198, 2 03 (2007). For the foregoing reasons, the judgment of the circuit court of Lake County is affirmed. Affirmed. McLAREN a

nd CALLU

M, JJ., concur.