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When millionaires can’t pay: Illinois Supreme Court decision sets ‘inability to pay’ standard

August 01, 2017
By Celia Gamrath
Celia Gamrath is a judge in the Cook County Circuit Court Chancery Division. She was assigned previously to the Domestic Relations Division and was a family law practitioner earlier.

celia.gamrath@cookcountyil.gov

The American rule provides that each party in litigation is responsible for paying his or her own attorney fees. This concept is familiar in most divisions but foreign in domestic relations, where Section 508 of the Illinois Marriage and Dissolution of Marriage Act grants the authority to assess fees against the other party in the form of contribution. See 750 ILCS 5/508, 5/503(j). In making an award of contribution, the court must consider the financial resources of the parties as well as statutory factors set forth in Sections 503 (property) and 504 (maintenance), if maintenance has been awarded.

Consideration of these statutory factors came about 20 years ago as a product of the “leveling of the playing field” amendments. Prior to then, courts awarded fees only where a spouse demonstrated an inability to pay. This “inability to pay” standard carried over to the modern day, despite no mention of it in the 1997 statutory amendments. And because this language is absent from the amendments, case law has created confusion over its meaning.

The Illinois Supreme Court recognized the divergent views among appellate panels and rectified the conflict. See In re Marriage of Heroy, 2017 IL 120205 (March 23, 2017). In Heroy, the Supreme Court held, “a party is unable to pay if, after consideration of all the relevant statutory factors, the court finds that requiring the party to pay the entirety of the fees would undermine his or her financial stability.” Id. at ¶19. A party need not show a bank balance of zero or destitution in order to be awarded contribution to his or her fees. If it did, Donna Tuke, the former Mrs. Heroy, never would have met the standard.

In Heroy, after 26 years of marriage, Tuke was awarded more than $4 million in assets and $35,000 per month in maintenance. After the divorce judgment, Heroy successfully petitioned to reduce the award of maintenance to $27,500 per month. However, by that time, his ex-wife’s assets had dwindled to half, mainly due to litigation fees.

The court granted Tuke’s petitions for contribution, awarding her $125,000 toward her attorney fees related to the maintenance modification and $35,000 in prospective appellate fees. The appellate court overturned both fee awards, finding there was no evidence in the record that Tuke, a millionaire, was unable to pay her fees.

The Supreme Court reversed the appellate court and affirmed the trial court’s $160,000 combined fee awards. The Supreme Court held that the trial court “properly considered the statutory factors to conclude that Tuke was not able to pay the entirety of her fees.” Id. at ¶20. These factors include all 12 factors of Section 503(d) and the 14 factors of Section 504, where maintenance is awarded.

After considering these factors, the trial court found Tuke’s retirement account would be jeopardized, and her financial stability undermined, if she had to pay all of her fees. In addition, the court found Heroy had the ability to pay some of her fees based on the increase in value of his assets and the value of his retirement account, which was expected to increase.

The Heroy decision clarifies the standard for contribution to attorney fees in domestic relations. It holds the court must consider the financial resources of the parties as well as statutory factors set forth in Sections 503(d) and 504 of the IMDMA.

In making a case for contribution, the movant should present the court with evidence of the parties’ financial resources and each statutory factor. The goal is to prove the movant has an inability to pay the entirety of his or her fees and the opponent has the ability to pay at least some portion of the fees. The trial court should make findings of fact by tracking each of the statutory factors.

The court’s decision to award fees is discretionary, and generally tough to overturn, particularly when it is clear the court considered the appropriate statutory factors and financial resources of the parties and there is evidence in the record to support the court’s findings of fact.

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