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In re Marriage of Barnett
State: Illinois
Court: 4th District Appellate
Docket No: 4-02-1073 Rel
Case Date: 12/05/2003

NO. 4-02-1073

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

In re: the Marriage of 
PHYLLIS JANE BARNETT, 
                      Petitioner-Appellee,
                      and
SOL BARNETT,
                      Respondent-Appellant.

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Appeal from
Circuit Court of
Champaign County
No. 00D139

Honorable
Michael Q. Jones,
Judge Presiding.



JUSTICE COOK delivered the opinion of the court:

Respondent, Sol Barnett, appeals a judgment of dissolution of marriage entered by the circuit court of Champaign Countyon September 5, 2002. Respondent argues the trial court erred(1) in barring him from presenting certain evidence as a sanctionfor refusing to afford discovery and (2) in finding that histransfer of a joint tenancy Fidelity account to petitioner,Phyllis Jane Barnett, constituted a gift, rendering the accountpetitioner's nonmarital property. We affirm.

Petitioner and respondent were married April 23, 1988. On February 29, 2000, petitioner filed a petition for dissolutionof marriage. Shortly after the petition was filed, petitionermoved to California and respondent moved to North Dakota.

Petitioner filed a request to produce and matrimonialinterrogatories on April 5, 2000. Respondent filed a motion foran extension of time, and on June 27, 2000, the trial courtentered an agreed order requiring respondent to furnish discoverywithin 60 days. When that was not done, the court, on January25, 2001, ordered discovery be furnished within 10 days, warningthat failure to do so would result in a default finding beingentered, and assessed attorney fees. Respondent delivered aresponse of sorts on February 5, 2001. Many of respondent'sanswers, however, included the phrases "records for 2000 and 2001are to be provided," "details are unavailable to respondent atthis writing," "respondent has not been able to access alldocuments needed to complete this answer," "respondent's effortsto complete a list, without access to records, continues," and"records are not available to me. Records are with accountant,Barb Lichti, petitioner, or in Champaign home." Lichti, however,stated that she informed respondent numerous times that she didnot have the records he sought.

At a hearing on March 19, 2001, respondent's attorneyadvised the court that he had supplied petitioner with 15 poundsof discovery response and "I kind of foresee the court having tolook through a thousand pages of documents to reconcile this." The trial court denied respondent's motion for an extension oftime to supplement discovery. At a later pretrial conference,the trial court advised the parties it would make a final rulingon discovery and "I expect both of you to have everything thatyou want the court to see that day so I can make a call so thatwe can get on with this case." On October 2, 2001, the courtmade its final ruling on discovery. The court stated "I believe'details are unavailable at this time' is in fact an improperanswer. It's a euphemism for saying I am not going to get aroundto answering your question yet." Accordingly, the court imposeda sanction, barring respondent from presenting any furtherevidence relating to financial information, and awarding attorneyfees.

Respondent argues the trial court erred in sanctioninghim on October 2, 2001, because by that time he was in compliancewith petitioner's discovery requests. An appellate court willnot overturn a trial court's sanction absent an abuse of discretion. See Ciampi v. Ogden Chrysler Plymouth, Inc., 262 Ill. App.3d 94, 108, 634 N.E.2d 448, 458 (1994). Respondent's "15 poundsof discovery" response was inadequate. In re Blank, 145 Ill. 2d534, 549, 585 N.E.2d 105, 112 (1991) (practice of answeringinterrogatories with vague, general responses and attaching tothem 23 pages of unverified, unidentified documents not specifically referred to or described in answer is not an acceptablesubstitute for answers required by court rule). Failure tocomply is unreasonable if it is a "deliberate, contumacious, orunwarranted disregard of the court's authority." Blott v.Hanson, 283 Ill. App. 3d 656, 662, 670 N.E.2d 345, 349 (1996). Ajust sanction is one which, "to the degree possible, insures bothdiscovery and a trial on the merits." Shimanovsky v. GeneralMotors Corp., 181 Ill. 2d 112, 123, 692 N.E.2d 286, 291 (1998). The purpose of the sanction is to coerce compliance with discovery orders, not to punish the remiss party. In re Marriage ofBooher, 313 Ill. App. 3d 356, 359, 728 N.E.2d 1230, 1232 (2000). When it becomes apparent that a party will not afford discovery,however, the trial court must devise some fair method to completethe case.

Applying these factors and principles to the present case, we find the trial court did not abuse its discretion bybarring respondent from presenting additional evidence of financial matters. An enormous potential for prejudice lies iffinancial information is missing due to respondent's failure tocomply with discovery. The court here was forced to make anumber of rulings without sufficient financial information. Forexample, although the court awarded the value of respondent'smedical practice to him, the court was unaware of the value ofthat asset. Petitioner claimed more than once that she did notknow the extent of respondent's wealth and she believed he washiding money and transferring money often. From the record it isclear respondent was a wealthy man with various assets and moneyplaced in numerous accounts. The trial court considered thepotential for prejudice to respondent and found the potentialprejudice to petitioner due to respondent's concealment ofinformation more compelling. The court imposed a sanctionproportionate to the gravity of respondent's discovery violations.

Respondent was allowed to testify and present additional evidence regarding a disputed $1,551,616.48 Fidelityaccount No. X53094005. At one time, this account containedrespondent's premarital funds and was a joint account between theparties. In 1995, however, respondent transferred the accountsolely to petitioner. Respondent testified he transferred theaccount to petitioner to protect the account from two malpracticeactions then pending against him. He anticipated the accountwould be returned to joint ownership upon his retirement inNovember 1999. Respondent admitted he understood when he transferred the account into petitioner's name that it was no longer ajoint account and that he did not have any ownership interest init. Petitioner testified respondent gave her the account as agift because "he's substantially older than me; and he wanted meto feel secure" and "at that time he cared about me." Respondentargued, however, that petitioner did not claim the account as hernonmarital property in her response to his interrogatories andfirst did so in her supplemental pretrial memorandum.

The trial court found that respondent made a gift ofthe account to petitioner and that the account was petitioner'snonmarital property. In doing so, the court stated "on myassessment of the credibility of the witnesses, I believed morelikely her version of the events and determined that amount, thatfund to be nonmarital property, so I awarded it to her."

The Illinois Marriage and Dissolution of Marriage Act(Dissolution Act) specifically provides that "non[]maritalproperty transferred into some form of co-ownership between thespouses" is presumed to be marital property. 750 ILCS5/503(b)(1) (West 2000). It has been held that the converse isalso true: that it is possible for one spouse to make a gift tothe other of marital property, which the recipient could claimthen as nonmarital. In re Marriage of Severns, 93 Ill. App. 3d122, 125, 416 N.E.2d 1235, 1237-38 (1981). Even where title isplaced solely in one person's name, however, there is apresumption that the property is marital property, whichpresumption can be overcome only by clear, convincing, andunmistakable evidence. In re Marriage of Davis, 215 Ill. App. 3d763, 771, 576 N.E.2d 44, 50 (1991).

Under the Dissolution Act, the preference is certainlyfor marital property. Nonmarital property will be found onlywhere the requirements of the Dissolution Act are specificallymet. There would seem to be a difference between the situationwhere marital property is placed in the name of the dominantspouse and the situation where marital property is placed in thename of the nondominant spouse. Compare Severns, 93 Ill. App. 3dat 124, 416 N.E.2d at 1237 (wife who executed a quitclaim deed tohusband testified "she had been harassed by him on the matter,and that she executed the deed to please him and to save hermarriage"), with In re Marriage of Leff, 148 Ill. App. 3d 792,807, 499 N.E.2d 1042, 1052 (1986) (husband testified hetransferred residence to wife only to protect the property from amalpractice action against him). The cases, however, have notmade that distinction.

Davis reversed a finding that the husband intended agift where he transferred a residence to his wife. The evidencein that case established that the conveyance was part of anestate-tax planning scheme. The husband continued to control thehome by making payments for mortgages, taxes, insurance, and bymaking improvements. Davis, 215 Ill. App. 3d at 773, 576 N.E.2dat 50-51. The trial court in Davis erred as a matter of law byrelying on a federal decision that gave controlling weight to thefact of conveyance. Davis, 215 Ill. App. 3d at 772, 576 N.E.2dat 50. In Leff, the court agreed with the trial court's findingof no donative intent when the husband transferred title to theresidence to his wife's name. Leff, 148 Ill. App. 3d at 807-08,499 N.E.2d at 1052-53. In Leff, the mortgage to the residencewas in both names, and the husband continued to make allmortgage, tax, and insurance payments on the property. Leff, 148Ill. App. 3d at 807, 499 N.E.2d at 1052.

In the present case, the trial court did not rely onthe mere fact of transfer. The trial court found, by clear andconvincing evidence, that respondent had a donative intent tovest title absolutely and irrevocably in the donee. The asset inthe present case was not a residence over which the donorcontinued to exercise dominion. It was an account, whichrespondent did not deal with after it was transferred. The courtmade it clear that it did not believe respondent's testimonyregarding the account. Even if respondent's testimony wereaccepted, that he transferred the account to protect it fromcreditors, it does not necessarily follow that respondentexpected the account to be returned to him. Perhaps it wassufficient that petitioner and not the creditors have theaccount.

Respondent essentially argues that he was lying to hiscreditors when he transferred the account in 1995, that he didnot really intend to give up his interest in the account. Wasthe respondent lying then or is he lying now? The decision wasone for the trial court, and the court resolved it againstrespondent. A decision is contrary to the manifest weight of theevidence when an opposite conclusion is apparent or when thefindings are unreasonable, arbitrary, or not based on theevidence. Rhodes v. Illinois Central Gulf R.R., 172 Ill. 2d 213,242, 665 N.E.2d 1260, 1274 (1996). There was certainly someevidence in the present case to support the trial court'sdecision. It is the province of the trial judge to determine thecredibility of the witnesses. In re Marriage of Barnes, 324 Ill.App. 3d 514, 520, 755 N.E.2d 522, 528 (2001). The trial court did not abuse its discretion by barringrespondent from presenting additional financial evidence attrial. The trial court's decision to classify the $1,551,616.48Fidelity account No. X53094005 as petitioner's nonmaritalproperty was not against the manifest weight of the evidence. Weaffirm.

Affirmed.

McCULLOUGH, J., concurs.

TURNER, J., specially concurs in part and dissents inpart.


JUSTICE TURNER, specially concurring in part anddissenting in part:

I respectfully dissent from that portion of themajority order finding the $1,552,616.48 Fidelity account No.X53094005 was petitioner's nonmarital property.

As the majority notes, to rebut the presumption theaccount at issue was marital property, petitioner bore the burdenof proving by clear, convincing, and unmistakable evidence thatshe acquired the account as a gift from respondent. The fact theaccount was listed in petitioner's name only was insufficient torebut the marital property presumption. Thus, petitioner had toprove respondent transferred the account to her with a donativeintent to pass title and relinquish all present and futuredominion over the account. See slip op. at 5-6. I findpetitioner's testimony was not clear, convincing, andunmistakable evidence and thus was insufficient to rebut themarital property presumption.

The facts of this case are similar to those in bothDavis, 215 Ill. App. 3d at 771-73, 576 N.E.2d at 49-51, and Leff,148 Ill. App. 3d at 806-08, 499 N.E.2d at 1052-53, where thecourts found the property was marital property. See slip op. at6-7. Here, respondent testified he transferred the account intopetitioner's name to protect the account from his pendingmalpractice lawsuits. See Leff, 148 Ill. App. 3d at 807-08, 499N.E.2d at 1052-53 (finding a lack of donative intent where therespondent testified he transferred property to his spouse toprotect it from a possible malpractice action). He anticipatedthe account would be returned to joint ownership when he retired. Contrary to the majority's finding, respondent continued to dealwith the account after the transfer by depositing his paycheckinto the account until the parties separated.

In this case, the trial court took judicial notice oftwo medical malpractice cases that were pending againstrespondent at the time of the transfer. That evidence supportsrespondent's testimony that the transfer was for asset protectionpurposes. Also, as in Davis, 215 Ill. App. 3d at 773, 576 N.E.2dat 50, respondent filed no gift tax return.

Moreover, petitioner did not assert the account atissue was her nonmarital property in both her response torespondent's interrogatories and her initial prejudgment pretrialmemorandum. It was not until her supplemental pretrialmemorandum that she alleged the account was a gift.

Petitioner cites In re Marriage of Weiler, 258 Ill.App. 3d 454, 463, 629 N.E.2d 1216, 1222 (1994), wherein the FifthDistrict distinguished the respondent donor's motive fortransferring his property from his intent for making thetransfer. The court found that "[m]otive is what prompts aperson to act or fail to act, and intent refers only to the stateof mind with which the act is done or omitted." Weiler, 258 Ill.App. 3d at 463, 629 N.E.2d at 1222. I am unconvinced and discernno reason to distinguish motive and donative intent as they arethe same concept.

The majority intimates its disapproval of respondent'sattempt to hide his assets from potential creditors. See slipop. at 7-8. This is certainly understandable, but by recognizingthe transfer here as a completed gift, the majority's rulingtends to give credence to the practice of hiding assets fromcreditors rather than discouraging it.

For the reasons stated, I would reverse the trialcourt's classification of the $1,552,616.48 Fidelity account No.X53094005.

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