THIRD DIVISION
February 20, 2002
In re MARRIAGE OF SABINA BIELAWSKI, | ) | Appeal from the |
) | Circuit Court of | |
) | Cook County. | |
Petitioner-Appellant, | ) | |
) | ||
and | ) | |
) | Honorable | |
DONALD RYCROFT, | ) | Elizabeth Loredo-Rivera, |
) | Judge Presiding. | |
Respondent-Appellee. | ) |
JUSTICE SOUTH delivered the opinion of the court:
Petitioner, Sabina Bielawski, appeals from a final judgment of the circuit court denyingher second amended motion to vacate the judgment and marital settlement agreement. Petitionerfiled a petition for dissolution of marriage, and respondent, Donald Rycroft, filed a counterpetition. The parties entered into a marital settlement agreement on or about September 24,1998, which was incorporated into the judgment for dissolution of marriage on September 28,1998.
The hearing on the parties' dissolution of marriage was held between September 21, 1998and September 29, 1998. During the trial, the parties entered into negotiations for a maritalsettlement agreement. Prior to calling petitioner as a witness, her attorney stipulated that theparties had been successful in entering into a negotiated settlement agreement which had beenreduced to writing.
Petitioner testified that she had signed the agreement, and that the terms and conditionswere incorporated into the marital settlement agreement. The terms of the agreement were thatrespondent would pay her $12,539 per month as unallocated maintenance and support from hispension benefits, which is equal to 45% of his gross income. Upon the death of either petitioneror respondent, petitioner's remarriage or her taking up residence with an adult male on a conjugalbasis, this support would terminate. Petitioner testified that she understood that she waived herright to any personal interest in respondent's personal property, i.e., his pension benefits, exceptto the extent that it provides a "stream of income" for her support.
Finally, petitioner testified that she understood all of the terms of the agreement, that shespent several days going over those terms with her attorney, that she believed at the time that theagreement was fair and equitable, that she intended to be bound by its terms and conditions, andthat she entered into the agreement freely, voluntarily and without coercion.
Subsequently, petitioner filed her first motion to vacate the marital settlement allegingthat it was unconscionable because it did not award her any part of the marital portion ofrespondent's pension pursuant to the Illinois Marriage and Dissolution of Marriage Act (the Act)(750 ILCS 5/503(d) (West 2000)). Respondent filed a 2-615 motion to dismiss, which wasgranted without prejudice. Petitioner then filed an amended motion to vacate the maritalsettlement agreement pursuant to section 502(b) (750 ILCS 5/502(b) (West 2000)), alleging thatthe marital settlement agreement should be vacated because it was unconscionable. Respondentfiled another motion to dismiss, which was granted without prejudice.
Petitioner then filed a second amended motion to vacate, which is the subject of thisappeal. The motion to vacate argued that the marital settlement agreement should be vacatedbecause it was unconscionable pursuant to section 502(b) of the Act and cited Articles 3 and 9 ofthe marital settlement agreement. Article 3 of the marital settlement agreement states in pertinentpart:
"ARTICLE 3
UNALLOCATED MAINTENANCE AND CHILD SUPPORT
3.1 Donald covenants and agrees that he will pay to SABINA, asand for unallocated maintenance and child support, from his CNApension and consulting contract the sum of $12,539.00 per monthwhich was forty-five percent (45%) of his gross income from thesesources, and from which funds SABINA shall provide for thesupport of the children except as is otherwise herein provided. These payments shall continue *** until the first to occur of thefollowing events:
a. The remarriage of SABINA.
b. The cohabitation by SABINA with an adult male on a resident,continuing, conjugal basis.
c. The death of SABINA.
d. The death of DONALD."
Article 9 states in pertinent part:
9.10 DONALD is awarded the following to be his sole andseparate property, free and clear of any claim by SABINA, exceptas otherwise provided for in this Agreement:
b. His CNA pension benefits, however, this shallnot affect SABINA's survivor rights to said benefits,or her rights to such benefits as part of the stream ofincome in connection with any determination ofunallocated maintenance and child support ormaintenance and child support or maintenance withDONALD may be obligated to pay to her, pursuantto the terms of this agreement."
Petitioner maintains that based upon the aforementioned sections of the marital settlementagreement, it is unconscionable pursuant to section 502(b) of the Act which provides in pertinentpart:
"The terms of the agreement, except those providing for thesupport, custody, and visitation of the children, are binding on thecourt unless it finds after considering the circumstances of theparties and any other relevant evidence provided by the parties, ontheir own motion or on the request of the court that the agreementis unconscionable." 750 ILCS 5/502(b) (West 2000).
Petitioner maintains that the trial court had continuing jurisdiction to modify, vacate or reviewthe agreement which was incorporated into the judgment for dissolution of marriage pursuant tosection 502(b) even though more than a year had elapsed since the judgment was entered, therebymaking it a nonfinal order.
In the alternative, petitioner argues that under section 2-1401 (735 ILCS 5/2-1401 (West2000)), she is entitled to relief from the judgment because she demonstrated a meritorious claimand diligence in making this argument to the trial court.
In her second amended motion to vacate, petitioner sets forth the following additionalallegations:
"[P]etitioner was denied a 'meaningful choice' with regardto respondent's pension because she had neither the informationnor the opportunity to elect to take a portion of respondent'spension as her share of the marital property.
Moreover, according to a document provided byrespondent's counsel the total value of the marital estate forsettlement purposes was $2,200,000 at the time of the Judgmentfor Dissolution of Marriage incorporating the Marital SettlementAgreement entered on September 29, 1998. When the presentvalue of the marital portion of respondent's pension as ofSeptember 29, 1998 (between $976,092 and $1,898,094) is addedto the settlement value contained in Exhibit E, the total value of themarital estate at the time would have ranged between $3,176,092and $4,098,094. Since Donald was to receive 40% of thesettlement value of $2,200,000 or $880,000, and all of the presentvalue of the marital portion of his pension in the amount of$976,092 to $1,898,094, Donald actually will receive between$1,856,092 to $2,778,094 as his share of the marital estate, whichamounts between 59% and 68% of the marital estate. An award of59% to 68% of the marital property to the husband, after an 18-year marriage where the husband had substantially greater income,earning power and capacity to acquire assets than the wife andwhere the parties' 3 minor children, who were 13, 11 and 10 at thetime of the Judgment was entered, is unconscionable.
Additionally, the fact that all of the attorney's fees and theparties' home equity loan are to be deducted from the proceeds ofthe sale of the marital home prior to a distribution of thoseproceeds to the parties, further reduces the petitioner's share of themarital property and makes the Agreement even moreunconscionable."
Respondent issued a subpoena to petitioner's former attorney who represented her duringthe negotiations of the marital settlement agreement. In response, petitioner filed a motion inlimine to bar his testimony based upon attorney-client privilege. Respondent filed a response,arguing that petitioner had waived the privilege by filing a malpractice claim against herattorney.(1) Specifically, respondent argued that petitioner had effectively waived the attorney-client privilege by bringing into issue the communications with her attorney concerning thesettlement and negotiations of the marital agreement, i.e., whether she made a "meaningfulchoice" regarding her ability to elect a share of respondent's pension as marital property.
The trial court denied petitioner's motion in limine in part and allowed it in part, stating:
"The Court hereby finds that:
SABINA BIELAWSKI waived her attorney-client privilege whenshe filed a malpractice claim against her former attorneys and madethe disclosures that her attorneys advised her:
'...that she had no choice that would permit her to have the pensionconsidered as property and further that her only right was to havethe pension considered 'a part of a stream of income' in calculatingthe gross income.'
'...that her only choice was to accept the pension in the calculationof Rycroft's income, i.e., as part of a stream of income for purposesof unallocated maintenance of support.'
NOW THEREFORE IT IS HEREBY ORDERED THAT:
The Motion in Limine is denied as to communications betweenSABINA BIELAWSKI and (her attorney) involving only theabove subject matter. The Motion in Limine is allowed as to allother communications between (her attorney) and SABINABIELAWSKI."
The trial court conducted a hearing on petitioner's motion to vacate. Four witnesses werecalled to testify at the hearing. Sander Goldstein, an insurance actuary, testified that he wasemployed to calculate the present value of respondent's pension. He made three calculations. The first calculation was the present value of respondent's pension as of September 29, 1998, forthe pension he would receive based upon his actual retirement date. That value was calculated at$1,845,510. The second calculation determined the present value of respondent's pension as if hehad actually retired on September 29, 1998, the date of the judgment. That value was calculatedat $2,041,180. The third calculation determined the present value of respondent's pension as ofSeptember 29, 1998, as if he had terminated his employment with CNA on the date he wasmarried, June 14, 1980, which resulted in a present value of $143,090.
Petitioner's former divorce attorney testified that he represented petitioner in negotiatingthe settlement agreement with respondent and in the trial for dissolution of marriage. During thecourse of his representation of petitioner, they discussed respondent's pension. Petitionerinformed him that respondent had already taken his pension, and that it was currently in paystatus, that two attorneys had informed her that she should consider the pension as maritalproperty, and that she wanted to know what his ideas were on how she should handle thisparticular asset.
He informed petitioner that there were two alternatives: either determine the present valueof the pension at a particular date or treat it as a "stream of income." He also advised her to hirean actuary to determine the present value of respondent's pension. These issues were discussedduring their initial meeting and "dozens of times thereafter in one form or another."
On July 9, 1998, petitioner faxed him a three-page document which she had removedfrom respondent's files in the marital residence. This document contained calculations of thepresent value of respondent's pension which came to approximately $1,540,000. After hereceived the fax, the attorney had another conversation with petitioner as to how they were goingto use that document as evidence at trial. He suggested that they could use the document as away of setting the present value of the pension. Since the document had been obtained bypetitioner, they did not have to disclose it, but they could call respondent as an adverse witness. He also suggested that they could avoid hiring an expert witness because that would be veryexpensive. He testified that petitioner agreed to all of his suggestions.
During the settlement negotiations the attorney testified that he insisted, at petitioner'srequest, that the pension be treated as property and that the division of the remainder of theproperty be 50/50. However, respondent refused to agree that the pension be treated as property,and eventually the parties agreed that the pension would be treated as a "stream of income," withthe remainder of the marital property being divided 60/40, with 60% going to respondent.
Petitioner testified at this hearing that no parenting contract was ever presented to her forher signature, that she never signed one, and that as far as she knows, there is no parentingcontract in existence. Her divorce attorney informed her that respondent's pension was a"stream of income" and had to be treated as a such. He never told her that the pension could betreated as property, and she was never presented with an "actuarially determined present value"of respondent's pension. She did not know the value of the pension at the time she signed themarital settlement agreement, and had she known it, she would have elected to treat it as propertyrather than as a stream of income. After entering into the agreement, she sought the legal adviceof another attorney who advised her that the pension should have been treated as property ratherthan as a "stream of income."
On cross-examination, petitioner admitted that at the time she retained her divorceattorney, she was aware that pension benefits were marital property, but he told her that thepension had to be treated as a "stream of income" because it was already in pay status. Furthermore, she requested an evaluation of the pension but never received one.
Respondent testified that he would not have agreed to his pension being divided asmarital property.
At the conclusion of the evidence, the trial court ruled that (1) the motion to vacate wasnot timely under section 502(b), and (2) petitioner had not met her burden of proving that theagreement was unconscionable. The court also held that petitioner had failed to establish ameritorious claim or defense or due diligence under section 2-1401.
Four issues have been raised for our review: (1) whether the trial court's decision to denyappellant's second amended motion to vacate the marital settlement agreement was erroneous asa matter of law where the agreement gave 100% of the property interest in respondent's pensionto respondent; (2) whether the trial court's finding that the agreement was not unconscionableunder section 502(b) was erroneous; (3) whether the trial court erroneously determined thatpetitioner's second amended motion to vacate did not diligently state a cause of action forunconscionability under section 2-1401; and (4) whether it was error to deny petitioner's motionin limine barring her former attorney from testifying due to attorney-client privilege and/or therule of confidentiality.
When a party seeks to vacate a property settlement incorporated into a judgment ofdissolution of marriage, all presumptions are in favor of the validity of the settlement. In reMarriage of Gorman, 284 Ill. App. 3d 171, 180, 671 N.E.2d 819 (1996). A settlement agreementis not typically subject to appellate review because an agreed order "is a recordation of theagreement between the parties and *** not a judicial determination of the parties' rights." In reHaber, 99 Ill. App. 3d 306, 309, 425 N.E.2d 1007 (1981). However, "[a] settlement agreementcan be set aside if it is shown that the *** agreement is unconscionable." Gorman, 284 Ill. App.3d at 180, 671 N.E.2d 819.
A marital settlement is unconscionable if there is "an absence of a meaningful choice onthe part of one of the parties together with contract terms which are unreasonably favorable to theother party." In re Marriage of Steadman, 283 Ill. App. 3d 703, 709, 670 N.E.2d 1146 (1996). Unconscionability encompasses "an absence of meaningful choice on the part of one of theparties together with contract terms which are unreasonably favorable to the other party." In reMarriage of Broday, 256 Ill. App. 3d 699, 704-05, 628 N.E.2d 790 (1993). The fact that anagreement "merely favors one party over another does not make it unconscionable." Gorman,284 Ill. App. 3d at 181, 671 N.E.2d 819. "To rise to the level of being unconscionable, thesettlement must be improvident, totally one-sided or oppressive." Gorman, 284 Ill. App. 3d at182, 671 N.E.2d 819. "A court should not set aside a settlement agreement merely because oneparty has second thoughts." In re Marriage of Hamm-Smith, 261 Ill. App. 3d 209, 214, 633N.E.2d 225 (1994).
To determine whether an agreement is unconscionable, we must consider two factors: (1)the conditions under which the agreement was made; and (2) the economic circumstances of theparties that result from the agreement. Hamm-Smith, 261 Ill. App. 3d at 219, 633 N.E.2d 225.
Section 503(d) of the Act requires the division of marital property upon the dissolution ofmarriage. 750 ILCS 5/503(d) (West 1996). Marital property is "all property acquired by eitherspouse subsequent to the marriage." 750 ILCS 5/503(a) (West 1996). This encompassespensions which accrue during a marriage. See In re Marriage of Wenc, 294 Ill. App. 3d 239, 689N.E.2d 424 (1998). Marital property must be divided in "just proportions" in light of the relevantcircumstances of the parties. 750 ILCS 5/503(d) (West 1996). Just proportions do notnecessarily mean mathematical equality, but the distribution must be equitable under thecircumstances. In re Marriage of Morris, 266 Ill. App. 3d 277, 281, 640 N.E.2d 344 (1994).
Additionally, to be entitled to relief under section 2-1401, the petitioner mustaffirmatively set forth specific factual allegations supporting each of the following elements: (1)the existence of a meritorious defense or claim; (2) due diligence in presenting this defense orclaim to the circuit court in the original action; and (3) due diligence in filing the section 2-1401petition for relief. The quantum of proof necessary to sustain a section 2-1401 petition is apreponderance of the evidence. Whether a section 2-1401 petition should be granted lies withinthe sound discretion of the circuit court depending upon the facts and equities presented and willbe disturbed on review only if the reviewing court finds an abuse of discretion.
The record reflects that during the 2