No. 2--04--0050

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT

JUSTICE KAPALA delivered the opinion of the court:

In postdissolution proceedings, respondent, Vicki D. Sebela (Vicki), appeals (1) an orderdenying her petition for a rule to show cause against petitioner, Julius Colangelo (Julius); and (2) anorder granting summary judgment to Julius (see 735 ILCS 5/2--1005(c) (West 2002)) on Vicki'spetition to increase child support. Vicki argues that the trial court erred in deciding that, as a matterof law, (1) Julius's stock bonuses were not income for purposes of calculating child support (see 750ILCS 5/505(a)(3) (West 2002)); and (2) there had been no substantial change in circumstances sincethe dissolution judgment (see 750 ILCS 5/510(a)(1) (West 2002)). We reverse both the orderdenying Vicki's petition for a rule to show cause and the grant of summary judgment on Vicki'spetition to increase child support. We also remand the cause.

The parties married in 1988 and have an adopted son, Ethan, born in 1999. On September9, 2002, the trial court dissolved the marriage. At that time, Julius worked for Navigant Consulting,Inc. (NCI), earning $147,500 annually. Vicki was a full-time homemaker who wrote a newspapercolumn, earning $840 annually. The trial court divided the marital property with the intent to award48% to Julius and 52% to Vicki. As pertinent here, Julius received 50% of the net value of vestedstock options in NCI "if & when *** exercised" and 100% of unvested stock options in NCI. Because the vested and unvested stock options had yet to be exercised, the judgment listed their valueas "unknown." In all, Julius's share of the marital property was valued at $152,777 plus his 50%share of the vested stock options and his 100% share of the unvested stock options. Vicki's shareof the marital property was valued at $164,264 plus her 50% share of the vested stock options. The parties received joint custody of Ethan, with Vicki the "primary residential parent." Juliuswas ordered to pay monthly child support of $1,656, which was 20% of what the court calculatedas his net monthly income (see 750 ILCS 5/505(a)(1) (West 2002)). Also, the court ordered Juliusto pay, as child support, "20% of net of any bonus/commission/overtime received."

On October 28, 2003, Vicki filed two pleadings. The first, a petition to increase childsupport, alleged that Julius's W-2 form for 2002 showed that the dissolution judgment was based ona miscalculation of his net income. The petition also alleged that, in 2003, federal tax rates haddeclined substantially, while federal tax deductions for dependent minors had increased. Finally,according to the petition, since the dissolution, Vicki's child-related expenses had increased.

The second pleading, a petition for a rule to show cause, had two counts. Count I allegedthat, since the dissolution, Julius had received 2,286 shares of NCI stock under a "value sharingcompensation agreement"; that the shares were income of which Julius owed 20% as child support;and that Julius had refused to pay any of this amount. Count II alleged that, late in 2002, Juliusreceived a cash bonus from NCI; that, as a result, he owed extra child support; and that he had paidonly part of what he owed. Vicki claimed that Julius was in contempt for refusing to pay any childsupport based on the 2,286 shares of NCI stock and for underpaying the bonus-based support.

Julius filed a response to the petition for a rule to show cause. In answering count I, heasserted that the receipt of the NCI stock resulted from his exercise of the unvested stock options thathe had received under the dissolution judgment and that had since become vested. Thus, the 2,286shares were marital property that had, in essence, already been allocated to him. Julius reasoned thatbecause the unvested options were his property, the distributions resulting from an exercise of theoptions could not also be income. Responding to count II, Julius asserted that he had paid Vicki thefull amount of bonus-based child support.

On November 10, 2003, the trial court ruled on Vicki's petition for a rule to show cause. Thecourt denied Vicki any relief on count I. The court's only basis for its ruling was that the unvestedstock options were marital property and, therefore, could not, when realized, be considered incomefor child support purposes. With regard to count II, the court ruled in Vicki's favor and orderedJulius to pay additional child support that was related to the cash bonus.

On November 20, 2003, Julius moved to dismiss the petition to increase child support (see735 ILCS 5/2--615 (West 2002)) or to grant summary judgment to him on it. Julius argued that therehad been no substantial change in circumstances since the dissolution judgment (see 750 ILCS5/510(a) (West 2002)). Specifically, Julius asserted, his W-2 forms proved that his base salary wasstill $147,500 a year. Also, while he had received bonus income in the interim, Vicki had received20% of the net amount as child support. Julius next argued that the trial court's original calculationof his net income was correct. Finally, he maintained that, although federal tax rates had decreasedsince the dissolution, any effect on his taxes was negligible. As support for his contention, Juliusclaimed that a table for 2003, prepared by a commercially available computer software program that,in part, computes child support and taxes, and a table that the court used in crafting the dissolutionjudgment in 2002, produced by the same commercially available software program, showed that childsupport would increase only 3.2%. Julius's motion was not notarized, attached no affidavits, and didnot purport to authenticate the attached copies of the tables.

On December 16, 2003, after a short hearing, the trial court denied Julius's motion to dismissthe petition for increased child support but granted summary judgment to him on the petition. Thecourt observed that the dissolution judgment stated that Julius's yearly salary was $147,500 and thatVicki had admitted that he was still receiving that salary. Also, the change in federal tax rates wasirrelevant because the dissolution judgment was not based on "actual taxes" and, even had it been,Vicki had produced no evidence of a substantial change in circumstances.

On January 15, 2004, Vicki filed a notice of appeal, from the order of November 10, 2003,denying her petition for a rule to show cause and the order of December 16, 2003, granting summaryjudgment to Julius on her petition to increase child support.

Julius argues that we lack jurisdiction to consider any challenges to the order denying Vicki'spetition for a rule to show cause. We disagree. The trial court denied Vicki's petition on November10, 2003. However, Vicki did not file a notice of appeal from this order until January 15, 2004. Thetimely filing of a notice of appeal is mandatory and jurisdictional. 155 Ill. 2d R. 301; In re Estate ofKunsch, 342 Ill. App. 3d 552, 553 (2003). Under Supreme Court Rule 303(a)(1), an appeal from afinal judgment in a civil case must be filed within 30 days of the entry of the judgment appealed orwithin 30 days after the entry of the order disposing of the last timely pending postjudgment motion. See 155 Ill. 2d R. 303(a)(1). Vicki argues that the order was not final because it left her petition forincreased child support pending and did not include language allowing an immediate appeal underSupreme Court Rule 304(a) (155 Ill. 2d R. 304(a)). Rule 304(a) applies "[i]f multiple parties ormultiple claims for relief are involved in an action." 155 Ill. 2d R. 304(a).

A final judgment terminates the litigation between the parties on the merits or disposes of theparties' rights with regard to either the entire controversy or a separate part of it. R.W. Dunteman Co.v. C/G Enterprises, Inc., 181 Ill. 2d 153, 159 (1998). The word "claim," as used in Rule 304(a),means "any right, liability or matter raised in an action." Marsh v. Evangelical Covenant Church ofHinsdale, 138 Ill. 2d 458, 465 (1990). The test for determining whether the order from which a partyattempts to appeal pursuant to Rule 304(a) constitutes a final order on a claim is "whether the orderappealed from constitutes a final determination of the parties' rights with respect to a definite andseparate portion of the subject matter." Krivitskie v. Cramlett, 301 Ill. App. 3d 705, 707 (1998).

A petition for a rule to show cause is the beginning step in initiating contempt proceedings. This court discussed the nature of an order denying a petition for a rule to show cause in In reMarriage of Alush, 172 Ill. App. 3d 646 (1988). Alush involved postdissolution proceedings in whichthe petitioner sought a rule to show cause against the respondent because the respondent removedthe minor children contrary to the terms of the divorce decree. Alush, 172 Ill. App. 3d at 647-49. The trial court denied the petition. Alush, 172 Ill. App. 3d at 649. The trial court also made a findingpursuant to Supreme Court Rule 304(a) (155 Ill. 2d R. 304(a)) that there was no just reason to delayenforcement or appeal. Alush, 172 Ill. App. 3d at 649. On appeal, the respondent contended thatthis court was without jurisdiction to consider the petitioner's appeal because the respondent's petitionto modify the divorce decree was still pending in the trial court. Alush, 172 Ill. App. 3d at 649. Weheld:

"In his petition for rule to show cause, [petitioner] sought to have [respondent] held incontempt. A contempt proceeding is an original special proceeding which is collateral to andindependent of the case in which the contempt arises. (People ex rel. Scott v. Silverstein(1981), 87 Ill. 2d 167, 172.) The court's order *** disposed of the rights of the parties withregard to the petition for rule to show cause, which was a separate, independent proceeding.Accordingly, the denial of the petition for rule to show cause is a final and appealable orderand Nancy's motion to dismiss the appeal is denied." Alush, 172 Ill. App. 3d at 650.

This court had occasion to address the holding in Alush in In re D.J.E., 319 Ill. App. 3d 489(2001). We stated that the judgment at issue in Alush was a final judgment that"may be appealed ifthe trial court has made the requisite finding under Rule 304(a)." D.J.E., 319 Ill. App. 3d at 495. More recently, this court held that the denial of a motion to increase child support filed in apostdissolution proceeding was not appealable, absent a Rule 304(a) finding, because a second countrequesting a rule to show cause had not yet been resolved. In re Marriage of Alyassir, 335 Ill. App.3d 998, 999-1001 (2003).

We conclude from the aforementioned cases that the denial of a petition for a rule to showcause filed in postdissolution proceedings is not a final and appealable order when otherpostdissolution proceedings are still pending. Therefore, such an order is not immediately appealableunless a Rule 304(a) finding is made. The fact that a contempt proceeding, including the petition fora rule to show cause, is an original special proceeding that is collateral to and independent of the casefrom which the contempt arises merely establishes that the denial of the petition amounts to a finaljudgment as to a claim within the meaning of Rule 304(a). Because Vicki's petition for increasedchild support was pending and no Rule 304(a) finding was made, Vicki could not appeal from thejudgment until her petition for increased child support was resolved. Therefore, her notice of appealwas timely and we have jurisdiction to consider the trial court's denial of the petition for a rule toshow cause.

Having determined that we have jurisdiction, we now turn to the merits of Vicki's first claim. Vicki claims that Julius's stock distributions should be considered income such that 20% of the valueof the stock distributions should be paid as child support. Julius contends that the doctrines of resjudicata and law of the case bar such an interpretation. Julius further contends that to count the stockdistributions as income would amount to double counting the value of the asset because it waspreviously distributed to the parties as property. We agree with Vicki that the trial court should haveconsidered Julius's stock distributions as income for child support purposes.

First, we find that res judicata and law of the case do not aid Julius. The doctrine of resjudicata has three elements: a final judgment on the merits rendered by a court of competentjurisdiction, an identity of cause of action, and an identity of parties or their privies. LP XXVI, LLCv. Goldstein, 349 Ill. App. 3d 237, 240 (2004). When all three elements are satisfied, the prior actionwill be conclusive to all actions that were or properly could have been raised. LP XXVI, LLC, 349Ill. App. 3d at 240. "The law of the case doctrine provides that rulings on points of law made by acourt of review are binding in that case upon remand to the trial court and on subsequent appeals tothat same reviewing court unless a higher court has changed the law." Emerson Electric Co. v. AetnaCasualty & Surety Co., 352 Ill. App. 3d 399, 417 (2004). The trial court did not rule on the issueof whether Julius's stock distributions could be considered income for child support purposes, nor hasthis court. The trial court awarded the stock options as marital property but had also previously ruledthat Julius was to pay "[20%] of net of any bonus/commission/overtime received." Prior to rulingon the petition for a rule to show cause, the trial court did not rule on whether the stock at issue wasa bonus that was income for child support purposes.

Second, we note that the trial court allocated the unvested stock options to Julius. Thesestock options subsequently became vested and were distributed, and it is this distribution that is atissue. Because the unvested stock options transformed into a realized distribution, it would seem thatthe distribution is not marital property being counted as income, but instead the fruits of the maritalproperty. However, even if the stock distribution is marital property as Julius claims, the pertinentcase law persuades us that marital property can also be income for child support purposes. In In reMarriage of Klomps, 286 Ill. App. 3d 710 (1997), the court ruled that the petitioner's retirementbenefits constituted income for child support purposes even though the same retirement benefits hadbeen divided as marital property. Klomps, 286 Ill. App. 3d at 713-17. The court found that section505(a) of the Illinois Marriage and Dissolution of Marriage Act (Act) (750 ILCS 5/505(a) (West2002)) compelled such a result. Klomps, 286 Ill. App. 3d at 713-17. Section 505(a)(3) states:

"(3) 'Net income' is defined as the total of all income from all sources, minus thefollowing deductions:

(a) Federal income tax (properly calculated withholding or estimatedpayments);

(b) State income tax (properly calculated withholding or estimated payments);

(c) Social Security (FICA payments);

(d) Mandatory retirement contributions required by law or as a condition ofemployment;

(e) Union dues;

(f) Dependent and individual health/hospitalization insurance premiums;

(g) Prior obligations of support or maintenance actually paid pursuant to acourt order;

(h) Expenditures for repayment of debts that represent reasonable and necessary expenses for the production of income, medical expenditures necessary topreserve life or health, reasonable expenditures for the benefit of the child and theother parent, exclusive of gifts. The court shall reduce net income in determining theminimum amount of support to be ordered only for the period that such payments aredue and shall enter an order containing provisions for its self-executing modificationupon termination of such payment period." 750 ILCS 5/505(a)(3) (West 2002).

The court in Klomps held that, because the petitioner's retirement benefits met the definition ofincome for child support purposes and none of the deductions were applicable, the "clear language"of section 505(a)(3) required that the retirement benefits be considered income despite the fact thatthey had been considered marital property previously. Klomps, 286 Ill. App. 3d at 714-15.

We note that in In re Marriage of Harmon, 210 Ill. App. 3d 92 (1991), overruled on othergrounds by In re Marriage of Rogers, 213 Ill. 2d 129 (2004), this court found that monthly interestpayments made to a noncustodial parent by a custodial parent were not income for purposes of fixingthe amount of child support because they comprised a share of the marital assets. Harmon, 210 Ill.App. 3d at 96. This holding seems to comport with Julius's theory that marital property cannot beincome for purposes of determining child support because this would give a double benefit. However, Harmon cited In re Marriage of Hart, 194 Ill. App. 3d 839 (1990), as authority for itsconclusion. Harmon, 210 Ill. App. 3d at 96. The Hart court simply stated that, when marital assetsare awarded, in part, because they come with the duty to repay marital debts associated with thoseassets, the marital debts should not be deducted from income for child support purposes because todo so would amount to a double benefit, that is, the receipt of the marital assets and a decreasedamount of child support to pay. Hart, 194 Ill. App. 3d at 850. There are, however, pronounceddifferences between Harmon and Hart. First, in Hart the court dealt with a deduction for a debt,whereas in Harmon the court dealt with a deduction for the receipt of money. Second, in Harmonthe deduction claimed by the payor parent was itself a marital asset, whereas in Hart the claimeddeduction was not a marital asset. Third, in Harmon the court's ruling avoided giving a double benefitto the parent receiving the child support, but in Hart the court was concerned about a double benefitaccruing to the payor parent. Fourth, the court in Hart determined, in effect, that a reduction in netincome was not warranted, whereas the holding in Harmon determined that a reduction in net incomewas warranted. With these differences in mind, we do not agree that Hart supports the propositionthat Harmon urges.

Also, we find that the decision in Harmon cannot stand given the plain language of the Act. As we discussed above, section 505(a)(3) provides the exclusive list of what can be deducted todetermine net income for purposes of child support. The decision in Harmon effectively adds anotherdeduction to the list, namely, items that would otherwise be income but were previously distributedas a marital asset. This amounts to judicial amendment of the statute, a practice that a court cannotand should not engage in. See Wade v. City of North Chicago Police Pension Board, No. 2--04--0047, slip op. at 13 (December 3, 2004). Furthermore, Hart, like Klomps, recognized that the plainlanguage of section 505 should be followed when determining whether a deduction is appropriate incalculating net income for purposes of child support. Hart, 194 Ill. App. 3d at 850-51 (finding thatthe trial court's deduction for "nonrecurring income" was in error because section 505 does notprovide for such a deduction and holding that "[t]he trial court's responsibility is to determine childsupport payments as required by section 505 of the Act"). Thus, we reject the holding in Harmon ascontrary to the plain and express language of section 505(a)(3). We find the reasoning in Klomps tobe more persuasive.

In this case, Julius was to pay 20% of any bonus as child support. The trial courtcharacterized the stock award to Julius as a bonus. The trial court stated:

" All right. And this is something that was actually previously awarded to him. I thinkthat's where it turns on. I think that this was a bonus that was provided to him prior toFebruary 28th of 2002, because it was awarded to him, but it hadn't vested. He realizes itnow."

The trial court ultimately held:

"You know, I am going to deny the motion with regard to Count 1.

* * *

And the basis is that the Court has defined this as property. And to me it would bethe same as if you received a piece of real estate, and then after the judgment, sold the realestate and got capital gains on it. And now this is considered to be income, and that isincome, but it's not income for purposes of child support, because it's property that wasdivided in a judgment for dissolution."

Julius's contention is that once the stock options were allocated as marital property, they could notlater be classified as income for child support purposes. Julius does not dispute that if the stockoptions had not been awarded as marital property, they would meet the definition of "income" oncedistributed. Further, the trial court's child support order listed bonuses as one source of income, andthere is no deduction listed in section 505(a)(3) for a stock bonus. Therefore, under Klomps, we findthat, even though the unrealized stock options were allocated to the parties as marital property, therealized stock distribution met the definition of "income" for purposes of determining child support,and the trial court erred in finding that the stock distribution was not income. Thus, we reverse thetrial court's denial of Vicki's petition for a rule to show cause and remand for further proceedings.

We now turn to the order granting summary judgment to Julius on Vicki's petition to increasechild support. Vicki argues that there are unresolved issues of fact that bear on whether she will beable to prove a substantial change in circumstances since the dissolution judgment (see 750 ILCS5/510(a)(1) (West 2002)).

Summary judgment is proper when the pleadings, depositions, and other matters on fileestablish that there is no genuine issue of material fact and that the moving party is entitled tojudgment as a matter of law. 735 ILCS 5/2--1005(c) (West 2002). Our review is de novo. Espinozav. Elgin, Joliet & Eastern Ry. Co., 165 Ill. 2d 107, 113 (1995).

Vicki's petition to increase child support alleged that circumstances had changed substantiallysince the dissolution because both the costs of rearing Ethan and Julius's ability to contribute to thosecosts had increased. Julius did not deny that Vicki's child-related expenses had increased, but hecontended that his ability to pay had not changed. In granting summary judgment to Julius, the trialcourt relied on Vicki's admission that Julius's base pay had not changed since the dissolution judgmentand the fact that the judgment was not based on "actual taxes." However, this reasoning missed thepoint. Vicki relied not on any increase in Julius's gross salary but on the alleged miscalculation of hisnet income and on changes in the federal tax laws, which, she claimed, increased Julius's net income. These are potentially meritorious grounds for increasing child support, as child support is to be basedon the payor spouse's net income. See 750 ILCS 5/505(a)(1) (West 2002). Thus, even thoughJulius's salary was unchanged, that did not establish that his ability to pay had not increased.

Julius asserted that his ability to pay had not substantially increased because any changes inthe federal tax rates had only marginally affected his net income. However, Julius's sole support forthis contention was the unsworn assertions in his motion for summary judgment and the unsworn andunauthenticated tables that were attached to his motion. Unsworn, unverified statements may not beconsidered in ruling on a motion for summary judgment. Rotzoll v. Overhead Door Corp., 289 Ill.App. 3d 410, 418 (1997); see Lewis v. Illinois Institute of Technology, 50 Ill. App. 3d 418, 420(1977). Because there was a question of fact as to whether Julius's net income had substantiallyincreased and there was nothing but unsworn assertions and unauthenticated documents supportingJulius's motion for summary judgment, the trial court should not have granted the motion. Therefore,we reverse the grant of summary judgment and remand the cause on Vicki's petition to increase childsupport.

Reversed and remanded.

O'MALLEY, P.J., and GILLERAN JOHNSON, J., concur.