Court Opinion

ID: 4582962
Source: CourtListenerOpinion
Date Created: 2020-11-02 21:08:02.416873+00
Date Added: 2024-06-11T13:47:22.748609
License: Public Domain

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                                Supreme Court                              Date: 2020.11.02
                                                                           13:44:48 -06'00'

                     In re Marriage of Zamudio, 2019 IL 124676

Caption in Supreme   In re MARRIAGE OF LOUISE ZAMUDIO, Appellee, and FRANK
Court:               OCHOA JR., Appellant.

Docket No.           124676

Filed                November 21, 2019

Decision Under       Appeal from the Appellate Court for the Third District; heard in that
Review               court on appeal from the Circuit Court of Whiteside County, the Hon.
                     John L. Hauptman, Judge, presiding.

Judgment             Appellate court judgment affirmed.
                     Circuit court judgment reversed.
                     Cause remanded.

Counsel on           Paul A. Osborn, of Ward, Murray, Pace & Johnson, P.C., of Sterling,
Appeal               for appellant.

                     Louis F. Pignatelli, of Pignatelli & Associates, P.C., and Allison B.
                     Fagerman, of Law Office of Allison B. Fagerman, P.C., both of Rock
                     Falls, for appellee.
     Justices                 JUSTICE KILBRIDE delivered the judgment of the court, with
                              opinion.
                              Chief Justice Burke and Justices Thomas, Garman, Karmeier, Theis,
                              and Neville concurred in the judgment and opinion.

                                              OPINION

¶1        The sole issue raised in this appeal is whether permissive pension service credit based on
      time served in the military is marital or nonmarital property under the facts of this marriage
      dissolution action. The parties purchased permissive service credit in the Illinois State
      Retirement System during their marriage based on time the respondent served in the active
      duty military prior to the marriage. See 40 ILCS 5/14-104(j) (West 2016) (allowing purchase
      of pension service credit for up to four years of active duty military service); 40 ILCS 5/1-
      119(5.5), (7.5) (West 2016) (defining “permissive service” to include, in relevant part, “service
      credit purchased by the member” and “regular service” as “service credit earned by the
      member” that “does not include service credit purchased by the member”). The appellate court
      held that the pension credit is marital property because it was purchased during the marriage
      with marital funds. 2019 IL App (3d) 160537. For the following reasons, we affirm the
      appellate court’s judgment and remand to the trial court for further proceedings.

¶2                                         I. BACKGROUND
¶3         Petitioner Louise Zamudio, formerly known as Louise Ochoa, and respondent Frank Ochoa
      Jr. were married in January 2000. In May 2014, Louise filed a petition for dissolution of the
      marriage in the Whiteside County circuit court. The parties resolved most of the issues in the
      dissolution proceeding but could not agree on the division of Frank’s Illinois State Retirement
      System pension. The parties disputed whether permissive service credit based on Frank’s prior
      active duty military service was marital or nonmarital property.
¶4         The record shows that Frank served in the United States Air Force from 1974 to 1980. In
      August 1989, he began working for the Illinois State Police. In September 2006, the parties
      paid $4813.20 to the State Retirement System to purchase 24 months of permissive military
      service credit. In August 2011, they again paid $4813.20 to the State Retirement System to
      purchase the remaining 24 months of permissive military service credit. Frank retired from the
      Illinois State Police in August 2011, with 320 months of service credit, consisting of 263.5
      months of regular service, 48 months of permissive service credit based on his active duty
      military service, 6 months of unused sick time, and 2.5 months of unused vacation time.
¶5         Frank began receiving monthly annuity payments from the State Retirement System in
      August 2011. As of September 2015, his monthly annuity payment was $9088.86. The
      permissive service credit purchased by the parties increased the monthly annuity payment by
      $1363.33. Accordingly, the monthly annuity payment would have been $7725.53 without the
      additional service credit. The parties agreed that Louise should receive 50% of the marital
      portion of the pension but disagreed on whether the marital portion included the amount
      attributable to the permissive service credit. Thus, as of September 2015, the amount in dispute

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       was $681.67 per month, or 50% of the $1363.33 increase in the monthly annuity payment
       resulting from the permissive service credit.
¶6          The trial court initially ruled that the permissive service credit was marital because it was
       earned or acquired during the marriage. In response to Frank’s motion to reconsider, however,
       the trial court reversed its ruling and held that the permissive service credit was properly
       classified as nonmarital because “what was purchased to enhance the pension *** was military
       time earned prior to the marriage.” The trial court ordered Frank to reimburse Louise in the
       amount of $4813.20, for her share of the marital funds used to purchase the permissive service
       credit.
¶7          In reversing the trial court’s judgment, the appellate court observed that In re Marriage of
       Ramsey, 339 Ill. App. 3d 752 (2003), suggests that courts must determine whether a pension
       enhancement is “derivative of the right to receive a pension in the first place or if the
       enhancement is nonderivative in the sense that the enhanced portion is directly and solely
       attributable to nonmarital contributions and not subject to division.” (Emphases in original.)
       2019 IL App (3d) 160537, ¶ 18. The appellate court rejected Frank’s argument that his
       eligibility for the permissive service credit stemmed entirely from his active duty military
       service completed 20 years prior to the marriage. 2019 IL App (3d) 160537, ¶ 19.
¶8          The appellate court instead held that Frank’s entitlement to an enhanced pension benefit
       by purchasing the service credit derived from his entitlement to the pension in the first place.
       2019 IL App (3d) 160537, ¶ 19. The appellate court further concluded that Frank did not
       acquire the permissive service credit at the time of his military service. Frank’s military service
       had no relationship to his pension until he purchased the service credit during the marriage
       with marital funds. 2019 IL App (3d) 160537, ¶ 20. Accordingly, the appellate court held the
       permissive service credit was marital property and remanded to the trial court for an equitable
       apportionment of the pension. 2019 IL App (3d) 160537, ¶¶ 22-24.
¶9          Justice Schmidt dissented, asserting that “Frank enhanced a nonmarital asset with marital
       assets, and therefore, he must repay, and I believe has repaid, Louise for her share of those
       funds. The trial court got it exactly right. Frank’s 48 months of military credit are no more
       marital property than are the 11 years of credit he earned for his Illinois State Police service
       prior to the marriage.” 2019 IL App (3d) 160537, ¶ 28 (Schmidt, J., dissenting). The dissent
       maintained that enhancement of Frank’s 48 months of military service with marital funds does
       not transmute his military service into marital property. 2019 IL App (3d) 160537, ¶ 32. Justice
       Schmidt, therefore, would have affirmed the trial court’s judgment holding the permissive
       service credit is nonmarital property. 2019 IL App (3d) 160537, ¶¶ 32-33.
¶ 10        We allowed Frank’s petition for leave to appeal (Ill. S. Ct. R. 315 (eff. July 1, 2018)).

¶ 11                                          II. ANALYSIS
¶ 12       The only issue in dispute before this court is whether the permissive service credit
       purchased by the parties is marital or nonmarital property. Frank contends the permissive
       service credit is nonmarital because it is derived primarily from his active duty military service
       completed 20 years prior to the marriage. Frank maintains his military service is the primary
       and necessary element required to claim the permissive service credit and the credit cannot be
       considered acquired or earned during the marriage given that he served in the military many
       years before the marriage. Frank concludes that the monetary contributions made during the

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       marriage to purchase the permissive service credit do not transmute his military service into
       marital property.
¶ 13       Louise responds that Frank’s military service, by itself, is not property. The permissive
       service credit enhancing Frank’s pension was only acquired when it was purchased during the
       marriage. Louise contends that the permissive service credit derives from both Frank’s prior
       military service and the monetary contributions made during the marriage. According to
       Louise, the permissive service credit is marital property because it was acquired during the
       marriage with marital funds.
¶ 14       In determining whether the permissive service credit is marital or nonmarital property, we
       must look to section 503 of the Illinois Marriage and Dissolution of Marriage Act (Act) (750
       ILCS 5/503 (West 2016)), defining marital and nonmarital property, and the Illinois Pension
       Code (Pension Code) (40 ILCS 5/1-101 et seq. (West 2016)), providing for the permissive
       service credit. Accordingly, this case presents an issue of statutory construction.
¶ 15       Our primary objective in construing a statute is to ascertain and give effect to the intent of
       the legislature. Accettura v. Vacationland, Inc., 2019 IL 124285, ¶ 11. The most reliable
       indicator of legislative intent is the statutory language, given its plain and ordinary meaning.
       Palm v. Holocker, 2018 IL 123152, ¶ 21. When the language of a statute is clear and
       unambiguous, we must apply it as written, without resort to aids of statutory construction. In re
       Marriage of Goesel, 2017 IL 122046, ¶ 13. We may not depart from the plain statutory
       language by reading into a statute exceptions, limitations, or conditions not expressed by the
       legislature. In re Marriage of Goesel, 2017 IL 122046, ¶ 13. Questions of statutory
       construction are reviewed de novo. Bank of New York Mellon v. Laskowski, 2018 IL 121995,
       ¶ 12.
¶ 16       Section 503(a) of the Act provides, in pertinent part:
                   “For purposes of this Act, ‘marital property’ means all property, including debts
               and other obligations, acquired by either spouse subsequent to the marriage, except the
               following, which is known as ‘non-marital property’:
                                                     ***
                       (6) property acquired before the marriage, except as it relates to retirement plans
                   that may have both marital and non-marital characteristics;
                       ***
                       (7) the increase in value of non-marital property, irrespective of whether the
                   increase results from a contribution of marital property, non-marital property, the
                   personal effort of a spouse, or otherwise, subject to the right of reimbursement
                   provided in subsection (c) of this Section[.]” 750 ILCS 5/503(a) (West 2016).
¶ 17       Section 503(b) establishes a presumption that all property acquired during the marriage is
       marital, stating that
                   “(b)(1) [f]or purposes of distribution of property, all property acquired by either
               spouse after the marriage and before a judgment of dissolution of marriage or
               declaration of invalidity of marriage is presumed marital property. *** The
               presumption of marital property is overcome by showing through clear and convincing
               evidence that the property was acquired by a method listed in subsection (a) of this

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                Section or was done for estate or tax planning purposes or for other reasons that
                establish that a transfer between spouses was not intended to be a gift.
                     (2) For purposes of distribution of property pursuant to this Section, all pension
                benefits (including pension benefits under the Illinois Pension Code, defined benefit
                plans, defined contribution plans and accounts, individual retirement accounts, and
                non-qualified plans) acquired by or participated in by either spouse after the marriage
                and before a judgment of dissolution of marriage or legal separation or declaration of
                invalidity of the marriage are presumed to be marital property. A spouse may overcome
                the presumption that these pension benefits are marital property by showing through
                clear and convincing evidence that the pension benefits were acquired by a method
                listed in subsection (a) of this Section.” 750 ILCS 5/503(b)(1), (2) (West 2016).
¶ 18       Finally, section 503(c)(2)(A) states:
                “When one estate of property makes a contribution to another estate of property, the
                contributing estate shall be reimbursed from the estate receiving the contribution
                notwithstanding any transmutation. No such reimbursement shall be made with respect
                to a contribution that is not traceable by clear and convincing evidence or that was a
                gift. The court may provide for reimbursement out of the marital property to be divided
                or by imposing a lien against the non-marital property that received the contribution.”
                750 ILCS 5/503(c)(2)(A) (West 2016).
¶ 19       The Act, therefore, generally distinguishes marital from nonmarital property based on
       when the property was “acquired,” but it does not define that term. When a term is not defined
       by a statute, it is appropriate to look to dictionary definitions to determine its ordinary and
       popularly understood meaning. In re Ryan B., 212 Ill. 2d 226, 232 (2004). Merriam-Webster’s
       Dictionary defines “acquire” as “1: to get as one’s own: a: to come into possession or control
       of often by unspecified means b: to come to have as a new or added characteristic, trait, or
       ability (as by sustained effort or natural selection). *** 2: to locate and hold (a desired object)
       in a detector.” Merriam-Webster’s Collegiate Dictionary 11 (11th ed. 2014). Black’s Law
       Dictionary 26 (9th ed. 2009) defines the term as “[t]o gain possession or control of; to get or
       obtain.”
¶ 20       In this case, Frank contends that the permissive service credit is nonmarital because it was
       acquired when he completed four years of active duty military service long before the marriage.
       He also suggests that the statutory monetary contributions made to purchase the permissive
       service credit may be reimbursed to the marital estate as provided in sections 503(a)(7) and
       503(c)(2)(A).
¶ 21       Critically, while Frank contends his prior military service is the primary element required
       to establish the permissive service credit, the Pension Code does not award any benefit for
       prior military service alone. Rather, the permissive service credit at issue in this case is
       provided by section 14-104(j) of the Pension Code, stating in pertinent part:
                “By paying the contributions otherwise required under this Section, plus an amount
                determined by the Board to be equal to the employer’s normal cost of the benefit plus
                interest, but with all of the interest calculated from the date the employee last became
                a member of the System or November 19, 1991, whichever is later, to the date of
                payment, an employee may establish service credit for a period of up to 4 years spent
                in active military service for which he does not qualify for credit under Section 14-

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               105,[1] provided that (1) he was not dishonorably discharged from such military service,
               and (2) the amount of service credit established by a member under this subsection (j),
               when added to the amount of military service credit granted to the member under
               subsection (b) of Section 14-105, shall not exceed 5 years.” 40 ILCS 5/14-104(j) (West
               2016).
¶ 22       Thus, section 14-104(j) sets forth two requirements for establishing permissive credit for
       prior active duty military service: (1) up to four years of active duty service without a
       dishonorable discharge and (2) payment of the statutory monetary contribution. Although
       Frank served in the Air Force from 1974 through 1980, the parties did not pay the statutory
       monetary contributions required to establish the permissive service credit until 2006 and 2011,
       during the marriage.
¶ 23       In this case, the permissive service credit was not “acquired” under that term’s ordinary
       and popularly understood meaning when Frank completed four years of active duty military
       service. Frank did not obtain or come into possession or control of the permissive service credit
       when he completed his active duty military service. To the contrary, Frank’s prior military
       service, by itself, does not have any value relative to his Illinois pension under the Pension
       Code. The statutory monetary contribution required to purchase the permissive service credit
       is undoubtedly an essential requirement for acquiring that credit. Indeed, the Pension Code
       defines “permissive service” to include “service credit purchased by the member.” (Emphasis
       added.) 40 ILCS 5/1-119(5.5) (West 2016). The military service, therefore, only made Frank
       eligible to purchase or “acquire” the permissive service credit through the monetary
       contribution required by the Pension Code. The permissive service credit was not “property
       acquired before the marriage,” as required to fall under the exception to marital property
       contained in section 503(a)(6) of the Act. 750 ILCS 5/503(a)(6) (West 2016).
¶ 24       Frank, nonetheless, contends that the permissive service credit should be treated the same
       as his regular service time earned during his employment with the Illinois State Police prior to
       the marriage because his military service also occurred before the marriage. Frank maintains
       that service credit is earned or “acquired” solely by virtue of when the work was performed,
       not when monetary contributions are made.
¶ 25       The Pension Code, however, provides a clear distinction between regular service and
       permissive service credit purchased based on prior military service. The Pension Code states
       “ ‘[r]egular service’ does not include service credit purchased by the member.” 40 ILCS 5/1-
       119(7.5) (West 2016). Further, “membership service” is defined as “[s]ervice rendered while
       a member of the System for which credit is allowable under this Article” (40 ILCS 5/14-103.13
       (West 2016)) and is distinguished from “creditable service” that includes both “[m]embership
       service and the total service certified in prior or military service certificates, if any.” 40 ILCS
       5/14-103.15 (West 2016). Thus, the Pension Code clearly differentiates between regular
       service and permissive service credit. Those two types of service credit cannot be analogized
       under the terms of the Pension Code. Our decision in this case is based solely on section 14-
       104(j), providing for the permissive service credit at issue here.

           1
            Section 14-105 allows service credit in specified circumstances without requiring contributions.
       40 ILCS 5/14-105 (West 2016). That statutory provision is not at issue in this case.

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¶ 26        At oral argument, Frank’s counsel also argued that Frank’s military service was a
       nonmarital asset, like physical property existing prior to the marriage, and the statutory
       monetary contributions only enhanced that existing asset. Under section 503(a)(7) of the Act,
       an increase in value of nonmarital property is also nonmarital, even if the increase results from
       a contribution of marital property. 750 ILCS 5/503(a)(7) (West 2016). The contribution of
       marital property may be reimbursed to the marital estate. 750 ILCS 5/503(c)(2)(A) (West
       2016).
¶ 27        Frank’s argument presumes that his military service is property. But, as noted previously,
       Frank’s military service, by itself, had no monetary or property value in relation to his Illinois
       pension. According to the plain language of section 14-104(j) of the Pension Code, the
       permissive service credit is acquired only if both statutory requirements are met. The
       permissive service credit was only acquired when the monetary contributions were made in
       2006 and 2011, with marital funds during the marriage. In fact, the permissive service credit
       would not have been acquired at all if both statutory requirements for obtaining it had not been
       met. Thus, we must reject Frank’s argument that the monetary contributions only enhanced an
       existing asset because that argument is contrary to the plain language of the Pension Code.
¶ 28        We also note that the parties rely on the appellate court’s decision in Ramsey. In that case,
       the appellate court considered whether pension enhancements resulting from early retirement
       incentives purchased by a party after dissolution of his marriage were marital property. In re
       Marriage of Ramsey, 339 Ill. App. 3d 752. Ramsey involved a different factual scenario and
       different statutory provisions establishing early retirement incentives. The holding in Ramsey
       was based on the early retirement incentives at issue in that case. See In re Marriage of
       Ramsey, 339 Ill. App. 3d at 766. Our decision in this case must be based on the specific
       statutory provisions at issue here. We, therefore, conclude that Ramsey is distinguishable and
       not helpful in deciding this case.
¶ 29        In sum, we do not disagree with Frank’s argument that his military service was an essential
       requirement for obtaining the permissive service credit. In fact, as Frank contends, the
       permissive service credit was obtained primarily “by his sustained effort and his own
       exertions.” The credit certainly could not have been obtained without Frank’s military service,
       and we do not dispute his contention that the permissive service credit acknowledges and
       rewards active duty military service.
¶ 30        Nonetheless, as in all cases involving statutory construction, we are guided and constrained
       by the plain language of the applicable statutes. See Michigan Avenue National Bank v. County
       of Cook, 191 Ill. 2d 493, 522 (2000). We cannot disregard the plain statutory language to reach
       a given result. Any change in the statutory language must come from the General Assembly,
       not this court. See Bremer v. City of Rockford, 2016 IL 119889, ¶ 34.
¶ 31        The statutory language controlling this case compels our decision that the relevant asset,
       i.e., the permissive service credit, was “acquired” only after all requirements for obtaining the
       credit were satisfied, including payment of the statutory monetary contributions. See 40 ILCS
       5/14-104(j) (West 2016) (setting forth prior active duty military service and payment of
       statutory monetary contributions as requirements for establishing permissive service credit).
       Here, there is no factual dispute on when the statutory requirements for establishing the
       permissive service credit were completed. It is undisputed that the monetary contributions to
       purchase the permissive service credit were made with marital funds during the marriage.

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       Accordingly, we conclude that the permissive service credit was acquired during the marriage
       and it is, therefore, marital property.

¶ 32                                        III. CONCLUSION
¶ 33       For the reasons stated above, we affirm the judgment of the appellate court and remand to
       the trial court for further proceedings.

¶ 34      Appellate court judgment affirmed.
¶ 35      Circuit court judgment reversed.
¶ 36      Cause remanded.

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