                           ILLINOIS OFFICIAL REPORTS
                                         Supreme Court




                           In re Marriage of McGrath, 2012 IL 112792




Caption in Supreme         In re MARRIAGE OF MARY ELLEN McGRATH, Appellee, and
Court:                     MARTIN GIBBONS McGRATH, Appellant.



Docket No.                 112792
Filed                      May 24, 2012


Held                       Illinois law and statutes do not permit monthly savings-account
(Note: This syllabus       withdrawals on which an unemployed ex-husband was living to be
constitutes no part of     considered his “income” for purposes of child support; but, on remand,
the opinion of the court   if the court finds that an appropriate support amount cannot be generated
but has been prepared      by following statutory guidelines, it should so state, explain its reasons
by the Reporter of         for deviating therefrom, and make an adjusted award.
Decisions for the
convenience of the
reader.)


Decision Under             Appeal from the Appellate Court for the First District; heard in that court
Review                     on appeal from the Circuit Court of Cook County, the Hon. Kathleen G.
                           Kennedy, Judge, presiding.


Judgment                   Appellate court judgment reversed.
                           Circuit court judgment reversed.
                           Cause remanded.
Counsel on                Paul L. Feinstein, of Chicago, for appellant.
Appeal
                          Pasulka & Associates, P.C., of Chicago (Mitchell B. Gordon, David P.
                          Pasulka and Molly E. Caesar, of counsel), for appellee.


Justices                  JUSTICE THOMAS delivered the judgment of the court, with opinion.
                          Chief Justice Kilbride and Justices Freeman, Garman, Karmeier, Burke,
                          and Theis concurred in the judgment and opinion.



                                             OPINION

¶1        At issue is whether money that an unemployed parent regularly withdraws from a savings
      account may be included in the calculation of net income when setting child support under
      section 505 of the Illinois Marriage and Dissolution of Marriage Act (the Act) (750 ILCS
      5/505 (West 2010)). We hold that it may not.

¶2                                        BACKGROUND
¶3        On September 14, 2007, the circuit court of Cook County entered a judgment dissolving
      the marriage of petitioner Mary Ellen McGrath and respondent Martin McGrath. The
      dissolution judgment incorporated a marital settlement agreement and a joint parenting
      agreement. The agreements provided that the parties’ twin children would reside with
      petitioner, and the parties agreed to contribute to the children’s various expenses. Respondent
      was unemployed at the time that the judgment was entered, so the issue of child support was
      reserved. The agreements provided that “the issue of additional contribution by Martin to the
      support of the parties’ children may be addressed by either party pursuant to agreement or
      petition to the court.”
¶4        Petitioner subsequently petitioned the court to determine child support. Respondent
      testified at the hearing that he was currently unemployed and living off assets that were
      awarded to him as part of the marital estate. Each month he withdraws around $8,500 from
      his savings account to meet his expenses. In an order dated February 23, 2010, the circuit
      court ordered respondent to pay $2,000 per month in child support. The court explained that
      it was not imputing income to respondent, but was basing the amount of child support on
      “Martin’s living expenses and the assets which are available to him to meet his living
      expenses.”1 In explaining its thoughts on the case from the bench, the circuit court stated:


              1
               The appellate court has held that income may be imputed to a noncustodial parent if one
      of the following factors is present: (1) the payor is voluntarily unemployed; (2) the payor is
      attempting to evade a support obligation; or (3) the payor has unreasonably failed to take advantage

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             “So there is case law in Illinois that provides that when one parent is receiving or
             obtaining money on a regular basis even if it’s not from employment that it may be
             used and should be used as support for the children. So I believe that’s the law, the
             case law that’s applicable in this case and so I believe there is an obligation to
             support the children with this regularly coming in money.”
¶5       Respondent moved to reconsider and vacate the support order. The circuit court denied
     respondent’s motion, and entered another written order that explained how the court had
     arrived at the $2,000 figure. The court stated:
             “The entry of a child support order is discretionary, but the determination of the
             minimum guidelines child support amount is mandatory. See 750 ILCS 5/505(a). In
             the February 23, 2010 order the court based child support on the funds Martin
             McGrath accesses on a regular basis to support himself in lieu of earning an income.
             However, the court did not expressly begin, as it must, with a determination of the
             minimum amount of support using the guidelines. See 750 ILCS 5/505(a)(1).
             Although not explicit, the court effectively used Martin McGrath’s passive net
             income of $8,500 per month, calculated the 28% guidelines, which is $2,380, and
             deviated downward from the guidelines by $380 per month to $2,000 per month
             without making the requisite finding that application of the guidelines would be
             inappropriate in this case and without stating the reasons for the variance from the
             guidelines. See ILCS 5/505(a)(2).”
¶6       The court further explained that it believed that its decision was supported by two
     appellate court cases, In re Marriage of Lindman, 356 Ill. App. 3d 462 (2005), and In re
     Marriage of Eberhardt, 387 Ill. App. 3d 226 (2008), which held that IRA disbursements
     could be included in a calculation of net income under section 505 of the Act. The court
     found that respondent’s financial circumstances did not fit neatly into the statutory scheme
     because he was unemployed but using his assets to maintain a lifestyle in which his
     household expenses were similar to petitioner’s expenses for a household of three. The court
     explained that respondent’s “use of assets to maintain his lifestyle supports treating them as
     income and calculating a minimum amount of child support on that basis.” The court thus
     concluded that respondent’s monthly net income for child support purposes was
     $8,173.69—$8,500 that he withdraws from his savings account, plus $171.69 from interest
     and dividends, minus a $498 health and hospitalization premium. The statutory 28% of that
     amount was $2,288.63, and the court made a finding under section 505(a)(2) that this figure
     was inappropriate and should be adjusted downwards by $288.63.
¶7       Respondent appealed, and the Appellate Court, First District, affirmed. 2011 IL App (1st)
     102119. Respondent argued in that court that it was error for the circuit court to include
     money he withdraws from his savings account in its calculation of his net income.



     of an employment opportunity. In re Marriage of Gosney, 394 Ill. App. 3d 1073, 1077 (2009). In
     explaining why it was not imputing income, the trial court stated that it was making no assessment
     of respondent’s employability and was treating this not as a case of a voluntarily unemployed parent,
     but rather as one of a parent who uses assets as a substitute for income rather than seek employment.

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       Respondent relied on In re Marriage of O’Daniel, 382 Ill. App. 3d 845 (2008), in which the
       Fourth District rejected the holdings of the cases that the trial court relied on and held that
       the money withdrawn from an IRA is not income. The appellate court held that it did not
       need to resolve the conflict in the appellate court over whether IRA withdrawals can be
       considered income under section 505(a) because this case does not involve an IRA. 2011 IL
       App (1st) 102119, ¶ 10.
¶8         The court explained that the money respondent withdraws from his savings account was
       properly included in the circuit court’s calculation of “net income” because the statute’s
       definition of “net income” is expansive: “the total of all income from all sources.” Id. ¶ 11
       (quoting 750 ILCS 5/505(a)(3) (West 2010)). The Act details specific exclusions from “net
       income” (see 750 ILCS 5/505(a)(3)(a) to (h) (West 2010)), but the appellate court concluded
       that “[t]here are no provisions in the Act excluding Martin’s monthly withdrawals from the
       definition of ‘net income.’ ” 2011 IL App (1st) 102119, ¶ 11. The appellate court further
       explained that “[a]n unemployed parent who lives off regularly liquidated assets is not
       absolved of his child support obligation.” Id. Although it had previously stated that the issue
       before it was one of statutory interpretation reviewed de novo (id. ¶ 6), the appellate court
       concluded that it could not find that the circuit court had abused its discretion in including
       savings account withdrawals in its calculation of “net income” (id. ¶ 11). We allowed
       respondent’s petition for leave to appeal. Ill. S. Ct. R. 315 (eff. Feb. 26, 2010).

¶9                                            ANALYSIS
¶ 10       The sole issue respondent raises is that the trial court erred in including funds he
       regularly withdraws from his savings account in its calculation of his net income for child
       support purposes.2 Because this issue involves solely a question of law—how to interpret the
       term “net income” in section 505 of the Act—our review is de novo. In re Marriage of
       Rogers, 213 Ill. 2d 129, 135-36 (2004). As this court explained in Rogers, the proper
       interpretation of a statute is not left to the trial court’s discretion. Id.
¶ 11       Section 505(a)(1) of the Act provides guidelines for the minimum amount of child
       support. For two children, that figure is 28% of a party’s net income. “Net income” is defined
       as “the total of all income from all sources.” 750 ILCS 5/505(a)(3) (West 2010). The statute
       then lists several items that are deducted from a party’s income to arrive at his or her net
       income. 750 ILCS 5/505(a)(3)(a) to (h) (West 2010).
¶ 12       The statute, however, allows a court to deviate from the guidelines if it determines that
       the amount generated is inappropriate:
                    “(2) The above guidelines shall be applied in each case unless the court makes
               a finding that application of the guidelines would be inappropriate, after considering
               the best interests of the child in light of evidence including but not limited to one or
               more of the following relevant factors:

               2
                Because this case does not involve disbursements from an IRA, we agree with the appellate
       court that this appeal is not the appropriate forum in which to resolve the current split in the
       appellate court over whether IRA disbursements should be considered income under section 505(a).

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                         (a) the financial resources and needs of the child;
                         (b) the financial resources and needs of the custodial parent;
                         (c) the standard of living the child would have enjoyed had the marriage not
                    been dissolved;
                         (d) the physical and emotional condition of the child, and his educational
                    needs; and
                         (e) the financial resources and needs of the non-custodial parent.
                    If the court deviates from the guidelines, the court’s finding shall state the amount
                of support that would have been required under the guidelines, if determinable. The
                court shall include the reason or reasons for the variance from the guidelines.” 750
                ILCS 5/505(a)(2)(a) to (e) (West 2010).
¶ 13        Here, the trial court correctly followed the procedure set forth in section 505(a). It
       calculated respondent’s net income, made a specific finding that 28% of that amount was not
       appropriate, and adjusted the child support award accordingly. Where the trial court erred,
       however, was in its initial calculation of respondent’s net income, because it included
       amounts that respondent regularly withdraws from his savings account.
¶ 14        This court noted in Rogers that, although the Act provides a definition of “net
       income”—the total of all income from all sources minus certain deductions—it does not
       separately define the term “income.” Thus, this court explained that the term must be given
       its plain and ordinary meaning. Rogers quoted the following definitions from Webster’s and
       Black’s: “something that comes in as an increment or addition *** : a gain or recurrent
       benefit that is usu[ally] measured in money *** : the value of goods and services received
       by an individual in a given period of time” (Webster’s Third New International Dictionary
       1143 (1986)), and “[t]he money or other form of payment that one receives, usu[ally]
       periodically, from employment, business, investments, royalties, gifts and the like” (Black’s
       Law Dictionary 778 (8th ed. 2004)). Rogers, 213 Ill. 2d at 136-37. Money that a person
       withdraws from a savings account simply does not fit into any of these definitions. The
       money in the account already belongs to the account’s owner, and simply withdrawing it
       does not represent a gain or benefit to the owner. The money is not coming in as an
       increment or addition, and the account owner is not “receiving” the money because it already
       belongs to him.
¶ 15        The appellate court’s analysis went off track when it stated that “[t]here are no provisions
       in the Act excluding Martin’s monthly withdrawals from the definition of ‘net income’ ”
       (2011 IL App (1st) 102119, ¶ 11), for it is the term “income” itself that excludes respondent’s
       savings account withdrawals. The appellate court should not have been looking for savings
       account withdrawals in the statutory deductions from income, because those withdrawals
       were not income in the first place. We note that, although petitioner’s attorney believed that
       the ultimate amount of child support arrived at by the trial court was appropriate, he
       conceded at oral argument that the appellate court’s analysis was problematic and, when
       pressed, agreed that he was not going to the mat in defense of that analysis.
¶ 16        The trial and appellate courts were rightly concerned that the amount generated by
       respondent’s actual net income was inadequate, particularly when the evidence showed that

                                                  -5-
       respondent had considerable assets and was withdrawing over $8,000 from his savings
       account every month. The Act, however, specifically provides for what to do in such a
       situation. If application of the guidelines generates an amount that the court considers
       inappropriate, then the court should make a specific finding to that effect and adjust the
       amount accordingly. One factor that the court can consider in determining that the amount
       is inappropriate is “the financial resources and needs of the non-custodial parent.” 750 ILCS
       5/505(a)(2)(e) (West 2010). Thus, calculating respondent’s net income correctly does not
       have to mean that respondent is “absolved of his child support obligation” (2011 IL App (1st)
       102119, ¶ 11), as the appellate court feared.

¶ 17                                     CONCLUSION
¶ 18       Because the trial court improperly included money that respondent withdraws from his
       savings account in its calculation of net income for child support purposes, we reverse its
       judgment and remand the cause for a new calculation of respondent’s child support
       obligation. The trial court should calculate respondent’s net income without regard to
       amounts that he regularly withdraws from his savings account. The court may then consider
       whether 28% of this amount is inappropriate based on, inter alia, respondent’s assets. If the
       court determines that the amount is inappropriate, it should make the specific finding
       required by section 505(a)(2) and adjust the award accordingly.

¶ 19      Appellate court judgment reversed.
¶ 20      Circuit court judgment reversed.
¶ 21      Cause remanded.




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