Court Opinion

ID: 3147650
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:34:58.698338+00
Date Added: 2024-06-11T15:07:39.341555
License: Public Domain

ILLINOIS OFFICIAL REPORTS
                                        Appellate Court

                      In re Marriage of Weisman, 2011 IL App (1st) 101856

Appellate Court            In re MARRIAGE OF LARRY E. WEISMAN, Petitioner-Appellee, and
Caption                    LAUREN RAUTBORD WEISMAN, Respondent-Appellant.

District & No.             First District, Third Division
                           Docket No. 1-10-1856

Rule 23 Order filed        August 24, 2011
Rule 23 Order
withdrawn                  September 16, 2011
Rehearing denied           September 20, 2011
Opinion filed              September 28, 2011

Held                       The trial court’s distribution of a residence and an investment to
(Note: This syllabus       petitioner as his nonmarital property was reversed and the cause was
constitutes no part of     remanded for reclassification and redistribution where the residence was
the opinion of the court   purchased in contemplation of the parties’ marriage in part with marital
but has been prepared      funds, and the investment was purchased with some funds derived from
by the Reporter of         the mortgages on the residence.
Decisions for the
convenience of the
reader.)

Decision Under             Appeal from the Circuit Court of Cook County, No. 06-D-11809; the
Review                     Hon. William S. Boyd, Judge, presiding.

Judgment                   Reversed and remanded.
Counsel on                 Joel Ostrow, of Bannockburn, for appellant.
Appeal
                           Karen L. Levine and Melissa B. Pryor, both of Miller, Shakman & Beem
                           LLP, and Bradley D. Birge, both of Chicago, for appellee.

Panel                      JUSTICE MURPHY delivered the judgment of the court, with opinion.
                           Justices Neville and Steele concurred in the judgment and opinion.

                                             OPINION

¶1          Respondent, Lauren Weisman, appeals from a judgment for dissolution of marriage
        entered by the circuit court of Cook County dissolving the marriage between her and
        petitioner, Larry Weisman, and awarding the parties’ Chicago residence and investments in
        a partnership to petitioner as his nonmarital property. On appeal, respondent contends that
        the court erred by allocating the residence and investments to petitioner as nonmarital
        property. For the reasons that follow, we reverse and remand.

¶2                                           BACKGROUND
¶3           On November 13, 2006, petitioner filed a petition for dissolution of marriage in which
        he asserted that he and respondent lived at 1921 North Cleveland Avenue in Chicago and did
        not have any children together. Petitioner further asserted that irreconcilable differences had
        caused a breakdown of their marriage and that any attempts at reconciliation would be
        impracticable and not in their best interests.
¶4           At trial, respondent testified that she and petitioner became engaged on January 1, 1997,
        and were married on June 21, 1997. When they first met, respondent was living in a
        townhouse in the Lincoln Park neighborhood in Chicago with her two children from a prior
        marriage, and petitioner was living in Highland Park, a suburb of Chicago. Petitioner also
        had two children from a prior marriage, and although he had custody, they lived with their
        mother. At the time respondent and petitioner became engaged, respondent was working as
        an interior designer for Paul Lauren Designs, a business she had formed with her uncle, Paul
        Marchetti.
¶5           Petitioner and respondent discussed the prospect of petitioner moving from Highland
        Park to Chicago shortly after they became engaged, and petitioner instructed respondent to
        look for a house for them. Respondent explained that their goal was to find a house in which
        all their children could live. Respondent began looking on January 5, 1997, and found a
        house she liked at 1921 North Cleveland Avenue on January 10, 1997. The house was still
        under construction when respondent first saw it, and the asking price was $1.7 million.

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       Respondent called her friend Greg Viti, a realtor, and told him that she and petitioner were
       buying a house and that she had found one she liked. Respondent and Viti looked at about
       25 houses over the next two weeks, and respondent would talk about the houses that she had
       seen with petitioner in the evenings and showed him the Cleveland house.
¶6         Respondent made numerous changes to the design of the house and began developing her
       designs the day she saw it. Petitioner did not purchase the house until he knew what design
       changes respondent was going to make to it, and respondent worked on those changes and
       their implementation on a daily basis until early 1998. Respondent worked with the architect
       and redesigned almost every room in the house to accommodate their family and provide
       bedrooms and washrooms for each of their four children. Petitioner did not object to any of
       respondent’s design changes, and as respondent worked on the house, she believed it was
       “our house” and she was never told otherwise. Respondent, however, was not involved in
       negotiating the price of the house with Jay Metzler, the builder/developer, and was not
       present for the closing.
¶7         After respondent and petitioner became engaged, petitioner began paying the rent for
       respondent’s Lincoln Park townhouse. In April or May 1997, the lease ran out on the
       townhouse and respondent moved in with petitioner in his Highland Park house while the
       Cleveland house was being constructed. Respondent moved into the Cleveland house in
       October 1997, and her children lived there as well until they went to college. Petitioner
       moved into the Cleveland house full-time sometime in 1998.
¶8         In July 1998, respondent received a phone call from petitioner’s ex-wife Wendy, who
       told her that petitioner was “a schemer” and had been bragging to her lawyer about how
       respondent’s name was not on the title to the Cleveland house. Respondent called petitioner
       and told him about the conversation, and he responded that his ex-wife was jealous of her
       and that “you own our house. We own it together.”
¶9         In 2004, the issue of whether respondent was on the title of the Cleveland house arose
       during marriage counseling. Petitioner told respondent that she was on the title of the house,
       and respondent went to the recorder of deeds and learned that she was not. Petitioner then
       told her that he would take care of it and that he had put the house in a land trust, but
       respondent did not know for sure whether he had actually done so.
¶ 10       Petitioner testified that he was living with his children in his house in Highland Park
       when he began dating respondent in January 1996. By that time, petitioner had decided that
       he was going to move to Chicago once his responsibilities to his children had been satisfied.
       His engagement to respondent, however, accelerated that move, and he began looking for a
       house in January 1997 with petitioner and Viti. Petitioner had a number of conversations
       with respondent regarding the purchase of the Cleveland house in January and/or February
       1997, during which he informed respondent that he would enter into the contracts to purchase
       the land and the house and take title, and respondent said that was “fine.”
¶ 11       Petitioner was involved in negotiations with Metzler from January through March 1997,
       and respondent was present for some of those meetings. Petitioner entered into a contract to
       purchase the land on which the house was to be built on February 10, 1997, and entered into
       a contract to purchase the house itself on March 18, 1997. The property was titled in

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       petitioner’s name, and he explained that he had decided to purchase the Cleveland house
       prior to his marriage to respondent so that it would constitute nonmarital property.
¶ 12       Petitioner further testified that the closing occurred on March 15, 1997, and that he made
       a payment of about $415,000 with funds from his Mesirow brokerage account to purchase
       the land on which the house was to be built. Petitioner was also to make three payments
       during construction, the first two of which were for $428,333 and which were made on April
       3 and May 30, 2007, with funds from his Mesirow account. The third payment was to be for
       $428,333, plus whatever extras had been built in by that time.
¶ 13       In March 1997, the in-house architect changed the plans for parts of the house based on
       requests made by petitioner and respondent. From June through October 1997 respondent
       and her children lived in petitioner’s house in Highland Park. During that period of time,
       petitioner and respondent monitored the progress of the construction of the Cleveland house,
       and they moved into that house on October 7, 1997.
¶ 14       Petitioner recalled that he had a discussion with respondent regarding the title of the
       Cleveland house in 2002 in the presence of a marriage therapist, in which respondent
       informed him that she had been to the recorder of deeds and had learned that the title to the
       property was in his name only. Respondent asserted that they should jointly hold title to the
       property, and petitioner told her that he would think about it, but did not subsequently change
       the title.
¶ 15       Petitioner further testified that he had obtained numerous interest-only mortgages on the
       Cleveland house, the first of which was obtained on June 19, 1997, two days before his
       marriage to respondent, from Mid-City National Bank (Mid-City) in the amount of $1.3
       million. Petitioner explained that he did so because he “wanted to take the purchase as far
       as [he] could before the marriage” and “wanted to do everything [he] possibly could to keep
       that asset for [him] and titled in [his] name.” Petitioner placed $1 million from that mortgage
       into his Mesirow account and loaned the other $300,000 to a company called Astarte Fibre
       Networks. On October 7, 1997, petitioner obtained a $1 million mortgage from Great West
       Mortgage Company (Great West) and used about $530,000 of those funds to make the final
       payment on the Cleveland house, while using the remainder of the funds to pay down the
       Mid-City mortgage and to pay off a margin debt on his Mesirow account. On December 31,
       1997, petitioner obtained a rewrite of the Mid-City mortgage for $809,025.87, of which he
       used $109,025.87 to pay off the remainder of the June 19, 1997, Mid-City mortgage and
       deposited the remaining $700,000 into his Mesirow account. On January 5, 1998, petitioner
       used that $700,000 to acquire an interest in a partnership called Styx, and on March 26, 1998,
       he invested an additional $400,000 in Styx with funds from his Mesirow account.
¶ 16       Petitioner subsequently obtained a mortgage for about $1.8 million from Merrill Lynch
       Credit Corp. (Merrill Lynch), in 2003 and used those funds to pay off the outstanding
       mortgages from Great West and Mid-City. On August 11, 2005, petitioner obtained another
       mortgage from Merrill Lynch for about $1.8 million and used those funds to pay off the 2003
       mortgage. At the time of trial, the 2005 mortgage was the only outstanding mortgage on the
       Cleveland property, and none of its principal had been paid down.
¶ 17       On cross-examination, petitioner stated that he had intended to buy a house in Chicago

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       following his engagement to respondent in which they could live with respondent’s children
       and that neither he nor respondent attended the closing. Petitioner also stated that respondent
       was angry when she told him she had learned that the Cleveland house was titled under his
       name only and that it appeared she had assumed her name was on it. Petitioner further stated
       that he had been making monthly interest payments on the various mortgages with money
       from his earnings and subsequent mortgages.
¶ 18       Following trial, the circuit court entered a judgment for dissolution of marriage in which
       it found that the Cleveland house and the Styx investment were petitioner’s nonmarital
       properties. In doing so, the court found that both petitioner and respondent had testified
       credibly regarding the purchase of the Cleveland house. The court further determined that
       the house was not purchased in contemplation of marriage where the only funds used in its
       purchase were from petitioner’s nonmarital property, petitioner signed the contracts for the
       sale of the land and the construction of the house, petitioner held sole title to the property,
       and the purchase was made three months prior to the marriage. Respondent now appeals
       from that order.

¶ 19                                         ANALYSIS
¶ 20       Respondent contends that the circuit court erred by determining that the Cleveland house
       and the Styx investment were petitioner’s nonmarital properties. In an action for dissolution
       of marriage, a circuit court’s classification of property as marital or nonmarital will not be
       reversed by a reviewing court unless its classification is against the manifest weight of the
       evidence. In re Marriage of Heroy, 385 Ill. App. 3d 640, 669 (2008). A court’s finding is
       against the manifest weight of the evidence “only if the opposite conclusion is clearly evident
       or if the finding itself is unreasonable, arbitrary, or not based on the evidence presented.”
       Best v. Best, 223 Ill. 2d 342, 350 (2006).

¶ 21                                     I. Cleveland House
¶ 22       Although property acquired before marriage is generally not considered marital property,
       it may be characterized as such where it was acquired “in contemplation of marriage.” 750
       ILCS 5/503(a)(6), (a)(7) (West 2006); In re Marriage of Olbrecht, 232 Ill. App. 3d 358, 363-
       64 (1992). Petitioner initially asserts that the “in contemplation of marriage” doctrine may
       only be applied where common finances were used to purchase the property at issue (In re
       Marriage of Philips, 200 Ill. App. 3d 395, 401 (1990)) and maintains that the doctrine should
       not be applied in this case because the Cleveland house was purchased entirely with his
       nonmarital funds.
¶ 23       Petitioner testified that he made three payments totaling $1.272 million toward the
       purchase of the Cleveland house and property between March 15 and May 30, 1997. On
       October 7, 1997, following his marriage to respondent, petitioner obtained a $1 million
       mortgage on the Cleveland house from Great West and used about $530,000 of those funds
       to make the final payment on the house. Petitioner then obtained a $1.8 million mortgage
       from Merrill Lynch in 2003 to pay off the Great West and Mid-City mortgages and obtained
       another $1.8 million mortgage from Merrill Lynch in 2005 to pay off the 2003 mortgage. On

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       cross-examination, petitioner stated that he made monthly interest payments on those
       mortgages with funds derived from his earnings and had not yet paid off the 2005 mortgage
       at the time of trial.
¶ 24        The record thus shows that petitioner paid $1.272 million toward the Cleveland property
       with his own nonmarital funds prior to marriage. The record also shows, however, that
       petitioner paid the remaining $530,000 with funds obtained from the Great West mortgage,
       which was obtained while he was married to respondent, and that he made monthly interest
       payments on that mortgage and the mortgages from which he obtained the funds to pay off
       that mortgage with marital funds. As such, we determine that the Cleveland property was not
       purchased solely with nonmarital funds where petitioner obtained $530,000 of the funds used
       to purchase the property from a mortgage on which he subsequently made monthly payments
       with marital funds. Thus, even if petitioner is correct in asserting that the “in contemplation
       of marriage” doctrine may not be applied where the property at issue has been purchased
       entirely with one spouse’s premarital funds, this is not such a case.
¶ 25        In reaching that determination, we have considered In re Marriage of Eddy, 210 Ill. App.
       3d 450 (1991), cited by petitioner, and find it distinguishable from this case. In Eddy, 210
       Ill. App. 3d at 457-58, this court held that the respondent’s businesses were formed from
       nonmarital funds where the loans that provided those funds were made to the respondent and
       his brother, were secured by property they owned, and were repaid with revenues from those
       businesses. In this case, however, the monthly payments petitioner made on the mortgages
       at issue were made with marital funds.
¶ 26        Having determined that the Cleveland house was not purchased entirely with petitioner’s
       nonmarital funds, we now consider whether the property was purchased in contemplation of
       marriage. In determining whether property was acquired in contemplation of marriage, a
       court should examine the totality of the circumstances to discover the parties’ intent.
       Olbrecht, 232 Ill. App. 3d at 363. In doing so, a court may consider such facts as the source
       of funds used to acquire the property, the identity of the person that signed the contract, the
       amount of time between the purchase and the marriage, and the name in which title was held.
       In re Marriage of Jacks, 200 Ill. App. 3d 112, 118 (1990).
¶ 27        For the reasons that follow, we conclude that the circuit court’s finding that the Cleveland
       house was not purchased in contemplation of marriage is against the manifest weight of the
       evidence. Both parties testified that the Cleveland house was purchased with the idea that it
       would be a marital residence where they each testified that they had intended to purchase a
       house in Chicago in which they could live with their children and petitioner testified that
       although he had planned to move to Chicago once his responsibilities to his children had
       been satisfied, his engagement to petitioner accelerated that move. In re Marriage of Ohrt,
       154 Ill. App. 3d 738, 742 (1987). Prior to purchasing the house, both petitioner and
       respondent had been looking for houses and had gone to see the Cleveland house. Olbrecht,
       232 Ill. App. 3d at 364; Jacks, 200 Ill. App. 3d at 118; In re Marriage of Malters, 133 Ill.
       App. 3d 168, 177 (1985). Respondent made changes to the design of the house to
       accommodate the parties’ four children. Olbrecht, 232 Ill. App. 3d at 364; Jacks, 200 Ill.
       App. 3d at 118. In addition, the parties were already engaged when they began looking for
       a house, the house was purchased only three months prior to their marriage, petitioner was

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       paying respondent’s rent at the time of the purchase, and respondent moved in with petitioner
       in his Highland Park house upon the expiration of her lease while the Cleveland house was
       being constructed. Cf. In re Marriage of Leisner, 219 Ill. App. 3d 752, 762-63 (1991)
       (residence was not marital property where it was purchased more than 15 months prior to the
       parties’ engagement and there was no evidence that the respondent planned to marry the
       petitioner at the time of purchase); In re Marriage of Reeser, 97 Ill. App. 3d 838, 840 (1981)
       (house was not marital property where there was no evidence as to when the parties became
       engaged or where the petitioner lived prior to purchasing the house).
¶ 28       Petitioner nonetheless asserts that a number of factors support the conclusion that the
       house was not purchased in contemplation of marriage. Petitioner first maintains that the
       house was purchased entirely with his nonmarital funds. However, as stated above, the record
       shows that $530,000 of the purchase price was paid for with proceeds from the Great West
       mortgage and that petitioner used marital funds to make the monthly payments on that
       mortgage and the mortgages from which he obtained the funds to pay off that mortgage.
       Ohrt, 154 Ill. App. 3d at 742; Malters, 133 Ill. App. 3d at 177-78.
¶ 29       Petitioner also maintains that the timing of the purchase is strong evidence of his intent
       that the house not become a marital asset where he testified that he purchased it prior to his
       marriage to respondent so that it would constitute nonmarital property. However, petitioner’s
       testimony that he purchased the Cleveland house prior to his marriage so that it would not
       constitute nonmarital property in the event he and respondent later divorced does not show
       that he did not purchase the house with the intent that it would be the marital residence. In
       fact, his concern regarding whether the house would be classified as marital property
       following a divorce further supports the conclusion that it was purchased in contemplation
       of marriage.
¶ 30       Further, while we agree with petitioner that he signed the contracts to purchase the land
       and the house itself and that title to the property was solely in his name and note that the
       record shows that petitioner expended a significant amount of his own nonmarital funds in
       the purchase of the house, we determine that those facts are outweighed by the substantial
       evidence showing that petitioner purchased the Cleveland house in contemplation of
       marriage outlined above. To the extent petitioner’s contribution to the acquisition of the
       house may have been disproportionate to that made by respondent, that is a factor the circuit
       court may consider in dividing the marital property (750 ILCS 5/503(d)(1) (West 2006)) or
       determining whether petitioner may be entitled to reimbursement (750 ILCS 5/503(c)(2)
       (West 2006)). We thus conclude that the circuit court’s finding that the Cleveland house is
       petitioner’s nonmarital property because it was not purchased in contemplation of marriage
       is against the manifest weight of the evidence.

¶ 31                                     II. Styx Investment
¶ 32       Petitioner further asserts that the Styx investments are nonmarital property because they
       fall within the statutory exception for property acquired after marriage in exchange for
       property acquired before the marriage. All property acquired by a spouse subsequent to
       marriage is marital property except for certain types of nonmarital property, such as “property

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       acquired in exchange for property acquired before the marriage.” 750 ILCS 5/503(a)(2)
       (West 2006). The record shows that petitioner made investments of $700,000 and $400,000
       in Styx in 1998 while he was married to respondent. Thus, those interests were acquired after
       the parties were married and are marital property unless they fall within one of the statutory
       exceptions.
¶ 33       Petitioner maintains that the interests in Styx were acquired in exchange for nonmarital
       property because they were purchased using funds derived from the mortgages on the
       Cleveland house. However, since we have already determined that the Cleveland house is
       marital property because it was bought in contemplation of marriage, we therefore must also
       determine that the interests in Styx were not acquired in exchange for nonmarital property.
       As such, we conclude that the circuit court’s classification of the Styx investment as
       petitioner’s nonmarital property is against the manifest weight of the evidence.

¶ 34                                      CONCLUSION
¶ 35       Accordingly, we reverse the portions of the order of the circuit court of Cook County for
       dissolution of the parties’ marriage awarding the Cleveland residence and the Styx
       investment to petitioner as his nonmarital properties and remand for reclassification and
       redistribution of the two assets and any further proceedings consistent with this order.

¶ 36      Reversed and remanded.

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