                          No. 3-07-0345
_________________________________________________________________
Filed May 28, 2008
                             IN THE

                   APPELLATE COURT OF ILLINOIS

                           THIRD DISTRICT

                             A.D., 2008

In re MARRIAGE OF             )   Appeal from the Circuit Court
LYNETTE KATHERINE SCHURTZ,    )   of the Tenth Judicial Circuit
                              )   Peoria County, Illinois
     Petitioner-Appellee      )
     Cross-Appellant,         )
                              )   No. 92-D-49
     and                      )
                              )
JOHN BARTON SCHURTZ,          )
                              )   Honorable
     Respondent-Appellant     )   Stephen Kouri
     Cross-Appellee.          )   Judge Presiding
_________________________________________________________________

       JUSTICE LYTTON delivered the Opinion of the court:
_________________________________________________________________

     In 1993, John and Lynette Schurtz entered into a marital

settlement agreement, requiring John to divide his retirement

benefits with Lynette.     In 2004, John stopped working and began

receiving disability benefits.    When John refused to divide his

benefits with Lynette, she filed a petition for rule to show cause

and to enforce judgment.     The trial court granted the petition.

Lynette then filed a petition for attorney fees, which the trial

court denied.

     John appeals, arguing that the trial court erred in ordering

him to pay benefits to Lynette.     Lynette cross-appeals, arguing

that the trial court erred in denying her requests for attorney

fees and prejudgment interest. We affirm.

     John and Lynette Schurtz were married in 1962.   John became a

firefighter for the City of Peoria soon thereafter. After 30 years
of marriage, Lynette filed a petition for dissolution of marriage.

In 1993, the trial court entered a judgment for dissolution that

incorporated a marital settlement agreement.    Section 6j of the

settlement agreement provided in pertinent part:

     "As a part of the distribution of marital property, the

     parties will divide evenly JOHN B. SCHURTZ' accrued

     retirement pension benefits as of September 16, 1993, if,

     as, and when received by him. * * * In the event a

     Qualified Domestic Relations Order is lawfully able to be

     entered in the future with regard to said pension, each

     party will cooperate to the entry thereof."

     In late 2004, when John was 62 years old, he became unable to

work as a firefighter.     He applied for occupational disease

disability benefits.   The City of Peoria Fireman's Pension Board

approved John’s application for benefits.     John began receiving

$4,374.00 per month in disability payments.

      In February 2005, Lynette's attorney sent John a letter

demanding that he consent to the issuance of a Qualified Domestic

Relations Order (QDRO) on Lynette’s behalf so that she could

receive a portion of John’s disability benefits in accordance with

the marital settlement agreement. When John refused, Lynette filed

a Petition for Rule a Show Cause and Enforce Judgment.

     At hearings on Lynette’s petition, John testified that he did

not intend to retire when he went on disability and would return to

work if he were physically able.     However, he admitted that he

signed a "Change of Status" form from the City of Peoria that

indicated his "purpose of leaving" as "retired." He admitted that


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he may stay on disability forever, but he may elect to receive

retirement benefits if that becomes more financially advantageous

to him.

     After hearings on Lynette’s petition, the trial court granted

Lynette's rule to show cause, holding that John's disability

pension was a retirement pension for purposes of section 6j of the

marital settlement agreement. Thereafter, Lynette filed a petition

for attorney fees, arguing that John's failure to consent to the

issuance of a QDRO was "without cause or justification."

     In a supplemental order, the court ordered John to pay Lynette

$1,534.34 of the $4,374.00 in benefits he received monthly and

$41,980.08 for past due amounts. The court did not require John to

pay prejudgment interest on the past due amounts but ordered that

he pay interest of 9.0% per annum on any future delinquent

payments.    The court denied Lynette’s request for attorney fees,

finding that John had a good faith justification for failing to pay

Lynette prior to the court ordering him to do so.

                                 I.

     The main objective when construing a marital settlement

agreement is to give effect to the purpose and intent of the

parties at the time they entered into the agreement.         In re

Marriage of Davis, 286 Ill. App. 3d 1065, 1066, 678 N.E.2d 68, 69

(1997).     Where the language of the agreement is clear and its

meaning is unambiguous, courts must give effect to that language.

Davis, 286 Ill. App. 3d at 1066, 678 N.E.2d at 69. However, if the

agreement is ambiguous, the court must ascertain the intent of the

parties by examining the facts and circumstances surrounding the


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formation of the agreement.         Davis, 286 Ill. App. 3d at 1067, 678

N.E.2d at 70.

     When a pension plan provides disability benefits as well as

retirement benefits and the marital settlement agreement refers

only to "retirement" benefits and is silent as to disability

payments, a court may reasonably interpret the agreement in one of

two ways: (1) as a grant to the ex-spouse of a portion of any

benefits received under the pension plan, or (2) as limiting the

ex-spouse's interest in the pension plan to normal, age-related

retirement benefits.       See Davis, 286 Ill. App. 3d at 1067, 678

N.E.2d at 70.     How the court interprets the agreement depends on

the facts and circumstances of the case. See Davis, 286 Ill. App.

3d at 1067, 678 N.E.2d at 70; Camp v. Hollis, 332 Ill. App. 60, 74

N.E.31   (1947)    (when      an    agreement   is    susceptible     to    two

constructions,    the   interpretation       that    makes   a   rational   and

probable agreement under the circumstances is favored).

     When a disabled ex-husband is not yet eligible for retirement

pay, a marital settlement agreement entitling the ex-wife to

"retirement" benefits should not be interpreted to grant her a

share of her ex-husband’s disability income.            See Davis, 286 Ill.

App. 3d 1065, 678 N.E.2d 68 (ex-husband became disabled before the

normal   retirement     age   and    would   begin    receiving    retirement

benefits, which ex-wife would share, when he turned 60); In re

Marriage of Belk, 239 Ill. App. 3d 806, 605 N.E.2d 86 (1992) (ex-

husband began receiving disability pension at age 41, before he was

eligible for regular retirement pay).               This interpretation is

reasonable because the disability pay is meant to replace the


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disabled ex-husband’s income, not act as retirement pay.       See

Davis, 286 Ill. App. 3d 1065, 678 N.E.2d 68;Belk, 239 Ill. App. 3d

806, 605 N.E.2d 86

     However, when an ex-husband is entitled to receive retirement

pay and is receiving disability income instead, a settlement

agreement providing the ex-wife a portion of retirement benefits

"can be reasonably interpreted in only one way -- the petitioner

[should] be paid the percentage of what would be the normal

retirement benefits, whether respondent [is] paid normal retirement

benefits or disability retirement benefits."    In re Marriage of

Marshall, 166 Ill. App. 3d 954, 962, 520 N.E.2d 1214, 1219 (1988).

It is not the label of the payments (i.e. disability or retirement)

that controls.   See Marshall, 166 Ill. App. 3d at 962, 520 N.E.2d

at 1219. "To allow a technicality, i.e., a disability benefit

instead of a regular retirement pay, to defeat the terms of the

agreement could hardly have been the intention of the parties."

Marshall, 166 Ill. App. 3d at 962, 520 N.E.2d at 1219.

     Here, John was eligible for retirement pay when he began

receiving disability benefits. See 40 ILCS 5/4-109(a) (West 2004).

He elected to receive disability payments instead of retirement

benefits. The amount of disability pension John receives is exactly

the same as he would receive as a retirement benefit.   See 40 ILCS

5/4-110(2) (West 2004).    Although John’s payments are labeled

"disability payments," they are, essentially, retirement benefits.

His disability benefits do not serve as income replacement, but as

a replacement for his retirement pension.    Thus, the trial court

properly found that Lynette was entitled to share in the payments.


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See Marshall, 166 Ill. App. 3d at 962, 520 N.E.2d at 1219.

                                 II.

     Section 508(b) of the Marriage and Dissolution of Marriage Act

(Act) provides:

     In every proceeding for the enforcement of an order or

     judgment when the court finds that the failure to comply

     with the order or judgment was without compelling cause

     or justification, the court shall order the party against

     whom the proceeding is brought to pay promptly the costs

     and reasonable attorney’s fees of the prevailing party.

     750 ILCS 5/508(b) (West 2004).

A court may deny attorney fees and costs where the failure to pay

was justified or not willful and wanton.        In re Marriage of

Michaelson, 359 Ill. App. 3d 706, 715, 834 N.E.2d 539, 547 (2005).

We will not reverse a trial court’s decision to deny attorney fees

unless the trial court abused its discretion.    Berger v. Berger,

357 Ill. App. 3d 651, 662, 829 N.E.2d 879, 889 (2005).

     A court may award prejudgment interest when warranted by

equitable considerations and disallow it where it would not comport

with justice and equity.   Regnery v. Meyers, 287 Ill. App. 3d 354,

366, 679 N.E.2d 74, 82 (1997).    A decision regarding prejudgment

interest is within the trial court’s discretion and will not be

disturbed on review absent an abuse of discretion.    See Jones v.

Hryn Development, Inc., 334 Ill. App. 3d 413, 419, 778 N.E.2d 245,

250 (2002).

     Here, Lynette sought attorney fees and prejudgment interest,

arguing that John’s refusal to consent to the qualified domestic


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relations order was without cause or justification.      The trial

court denied Lynette’s requests, explaining:

     "The issues presented by this dispute were difficult and

     unique.     While on the one hand Respondent candidly

     testified that he did not want Petitioner to share in his

     monthly check, the legal stance he advanced was not

     without an arguable basis. Accordingly, the court finds

     that there was a good faith justification for failure to

     pay thus far.   Accordingly, no legal fees under Section

     508(a) or (b), or ‘prejudgment’ interest, shall be

     awarded."

     The trial court did not err in denying Lynette attorney fees

under section 508(b) of the Act.     John had a good faith argument

that he was not required to pay Lynette any portion of his

disability payments based on a narrow reading of the marital

settlement agreement. See Davis, 286 Ill. App. 3d 1065, 678 N.E.2d

68; Belk, 239 Ill. App. 3d 806, 605 N.E.2d 86.   Although the trial

court ultimately found that John’s interpretation of the marital

agreement was incorrect, it was not unreasonable.    See Davis, 286

Ill. App. 3d 1065, 678 N.E.2d 68; Belk, 239 Ill. App. 3d 806, 605

N.E.2d 86. Thus, the trial court did not abuse its discretion by

denying Lynette her attorney fees.

     Additionally, the trial court’s decision to deny Lynette

prejudgment interest was not an abuse of discretion.     Under the

trial court’s supplemental order, Lynette received over $41,000 in

past due amounts from John and would continue to receive over

$1,500 from John each month. Since Lynette received a significant


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recovery, the trial court did not abuse its discretion in denying

her request for prejudgment interest.            See    Regnery, 287 Ill. App.

3d at 366-67, 679 N.E.2d at 82.

                                   CONCLUSION

       The   judgment   of   the   circuit      court   of   Peoria   County   is

affirmed.

       Affirmed.

       CARTER, J., concurring.

       JUSTICE HOLDRIDGE, dissenting in part and concurring in part:

       I believe that the trial court and the majority herein would

be correct in awarding Lynette Schurtz a portion of John Schurtz’s

disability benefits were it not for the fact that disability

benefits paid pursuant to section 4-110.1 of the Illinois Pension

Code (40 ILCS 5/4-110.1 (West 2004)) are, as a matter of law, not

subject to division in a dissolution proceeding. I must therefore

respectfully dissent from the ruling upholding the division of

John’s disability pension.

       The Associated Fire Fighters of Illinois and Board of Trustees

of the Firefighters’ Pension Fund of the City of Peoria, each filed

amicus curiae in this matter arguing it was the intent of the

legislature not to make disability benefits subject to payment to

an alternate payee.          Both point out that disability benefits,

unlike retirement benefits, are not entitlements subject to the

discretion of the member.          Rather, disability benefits are only

paid   after   the   fiduciary     board   is    satisfied     that   the   rigid

requirements for awarding disability benefits have been met. Krohe

v. City of Bloomington, 204 Ill. 2d 392 (2003);                       Village of

Stickney v. Board of Trustees of the Police Pension Fund, 347 Ill.
App. 3d 845 (2004).

     The amici also point out that the Pension Code implicitly

exempts disability benefits from distribution to a third party

payee.   The Code provides for distribution of benefits to third

party payees under a Qualified Illinois Domestic Relations Order

(QILDRO). 40 ILCS 5/4-119 (West 2004), but then specifically

provides that "a QILDRO shall not apply to or affect the payment of

any survivor’s benefit, death benefit, disability benefit, life

insurance benefit, or health insurance benefit."     40 ILCS 5/1-

119(b)(4) (West 2004).      Thus, the amici maintain, the express

language of the pension code excludes disability benefits from

payment to an alternate payee.

     This presents a matter of statutory interpretation which

presents an issue of law to be reviewed de novo. City of Belvidere

v. Illinois State Labor Relations Board, 181 Ill. 2d 191 (1998).

While there are no cases adopting the position articulated by the

amici, I am convinced that the legislative intent is nonetheless

clear.   Based upon the statutory analysis proffered by the amici,

I would find that the trial court erred as a matter of law in

subjecting John’s disability benefit to division. I would reverse

and remand on that basis.

     I concur with the majority’s decision to affirm the trial

court’s denial of Lynette’s motion for attorney fees.




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