                           ILLINOIS OFFICIAL REPORTS
                                         Appellate Court




                      In re Marriage of Mathis, 2011 IL App (4th) 110301




Appellate Court            In re: the Marriage of KENNETH W. MATHIS, Petitioner-Appellant,
Caption                    and TERRI D. MATHIS, Respondent-Appellee.



District & No.             Fourth District
                           Docket No. 4-11-0301


Argued                     October 19, 2011
Filed                      November 9, 2011


Held                       The appellate court answered a certified question pursuant to Supreme
(Note: This syllabus       Court Rule 308 as to the appropriate date for valuation of marital property
constitutes no part of     in a bifurcated dissolution proceeding when a grounds judgment has been
the opinion of the court   entered and there is a lengthy delay between the entry of the grounds
but has been prepared      judgment and the hearing on ancillary issues by finding that the
by the Reporter of         appropriate date is the date of the trial on the property-distribution matter
Decisions for the          or some other date as close to the date of that trial as is practicable.
convenience of the
reader.)


Decision Under             Appeal from the Circuit Court of Champaign County, No. 00-D-719; the
Review                     Hon. Arnold F. Blockman, Judge, presiding.



Judgment                   Question answered; cause remanded.
Counsel on                  Matthew P. Kuenning and Traci E. Nally (argued), both of Nally, Bauer,
Appeal                      Feinen & Mann, P.C., of Champaign, for appellant.

                            Sarah B. Tinney (argued), of Erwin, Martinkus & Cole, Ltd., of
                            Champaign, for appellee.


Panel                       JUSTICE TURNER delivered the judgment of the court, with opinion.
                            Justice Pope concurred in the judgment and opinion.
                            Justice Appleton specially concurred in the judgment, with opinion.




                                               OPINION

¶1          In the dissolution-of-marriage proceedings of petitioner, Kenneth W. Mathis, and
        respondent, Terri D. Mathis, the Champaign County circuit court certified the following
        question for interlocutory review pursuant to Illinois Supreme Court Rule 308 (eff. Feb. 26,
        2010):
            “In a bifurcated dissolution proceeding, when a grounds judgment has been entered, and
            when there is a lengthy delay between the date of the entry of the grounds judgment and
            the hearing on ancillary issues, is the appropriate date for valuation of marital property
            the date of dissolution or a date as close as practicable to the date of trial of the ancillary
            issues?”
        We granted petitioner’s application for leave to appeal and, as a matter of first impression,
        interpret the application of section 503(f) of the Illinois Marriage and Dissolution of
        Marriage Act (Dissolution Act) (750 ILCS 5/503(f) (West 2000)) to bifurcated dissolution
        proceedings in which the ancillary issues are determined after the dissolution judgment on
        grounds. Our interpretation of section 503(f) demonstrates the appropriate valuation date for
        the situation presented is the date of trial on the property-distribution matter or some other
        date as close to the date of that trial as is practicable and we remand for further proceedings.

¶2                                        I. BACKGROUND
¶3          The parties married in August 1977 and had three children, Corey (born in September
        1984), Jamie (born in May 1986), and Aaron (born in August 1989). In November 2000,
        petitioner filed his petition for dissolution of the parties’ marriage. At a March 26, 2001,
        hearing, the trial court awarded the parties a judgment of dissolution, reserved ruling on the
        ancillary issues, and noted a written judgment order on grounds would be entered. In October
        2002, petitioner filed a motion for the entry of the dissolution judgment on grounds only,
        which the court denied in December 2002. In September 2003, petitioner filed a second

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     motion for the entry of a dissolution judgment on grounds only.
¶4       On April 6, 2004, the trial court commenced the hearing on ancillary issues. The next
     day, the court continued the hearing until September 2004. On August 24, 2004, the court
     entered the dissolution judgment as to grounds only. The September 2004 hearing for the
     ancillary issues was continued.
¶5       In November 2005, petitioner filed a motion in limine to establish the valuation date of
     the marital property. After a December 2005 hearing on petitioner’s motion, the trial court
     took the matter under advisement and ordered the parties to submit briefs on the issue. In
     February 2006, the court set the valuation date as January 1, 2006, citing section 503(f) of
     the Dissolution Act and the facts of the case. The hearing on the ancillary issues did not
     resume after that order, and, in fact, the docket sheets contain no entries between August 30,
     2007, and February 3, 2010.
¶6       In May 2010, the trial court set the continued hearing on the ancillary issues for
     November 2010. In October 2010, respondent filed a motion to change the valuation date,
     and petitioner filed a motion to reconsider the valuation date. After a December 3, 2010,
     hearing, the court set a valuation date of December 31, 2010. On December 14, 2010,
     petitioner filed a motion for a Rule 308 finding. On February 11, 2011, the court granted
     petitioner’s request and noted a Rule 308 order would be entered. On March 24, 2011, the
     court entered the written Rule 308 order, certifying the previously stated question. On April
     6, 2011, petitioner filed his timely application for leave to appeal pursuant to Rule 308, and
     this court allowed the appeal on May 11, 2011. Thus, we have jurisdiction of this cause under
     Rule 308.

¶7                                        II. ANALYSIS
¶8        The question certified for review requires us to interpret section 503(f)’s applicability to
     bifurcated dissolution proceedings where the grounds judgment has been entered before a
     hearing on the ancillary issues. Despite the fact section 503(f) became effective on January
     1, 1993 (Pub. Act 87-881, § 1 (eff. Jan. 1, 1993) (1992 Ill. Laws 1019, 1022-23)), no
     reviewing court has specifically addressed section 503(f)’s application to such proceedings.
     See, e.g., In re Marriage of Awan, 388 Ill. App. 3d 204, 209, 902 N.E.2d 777, 783-84 (2009)
     (finding the date of dissolution is the proper valuation date for property in a bifurcated
     proceeding without mentioning section 503(f)); see also In re Marriage of Asher-Goettler,
     378 Ill. App. 3d 1023, 1033, 883 N.E.2d 564, 572 (2008) (citing section 503(f) in finding the
     trial court erred by using the separation date in determining the value of a mortgage in a
     nonbifurcated hearing); In re Marriage of Donovan, 361 Ill. App. 3d 1059, 1064-65, 838
     N.E.2d 310, 315-16 (2005) (citing section 503(f) in finding the trial court did not commit
     error in valuing a 401k account in a nonbifurcated hearing). Petitioner asserts section 503(f)
     does not apply to bifurcated dissolution proceedings, and thus that provision did not change
     the existing case law, which held the date of valuation was the date of the dissolution. See,
     e.g., In re Marriage of Rossi, 113 Ill. App. 3d 55, 60, 446 N.E.2d 1198, 1202 (1983).
     Respondent disagrees and asserts the plain language of section 503(f) indicates the valuation
     date is a date as close as practicable to the date of trial on the ancillary issues. Respondent


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       also argues a valuation date near trial is warranted based on petitioner’s actions during these
       proceedings. However, we agree with petitioner the latter argument is irrelevant to the
       certified question at issue in this Rule 308 appeal.
¶9          The fundamental rule of statutory construction requires courts to ascertain and give effect
       to the legislature’s intent. General Motors Corp. v. Pappas, 242 Ill. 2d 163, 180, 950 N.E.2d
       1136, 1146 (2011). The statutory language, given its plain and ordinary meaning, best
       indicates the legislature’s intent. Pappas, 242 Ill. 2d at 180, 950 N.E.2d at 1146. In
       interpreting a statutory provision, courts evaluate the statute as a whole, “with each provision
       construed in connection with every other section.” Pappas, 242 Ill. 2d at 180, 950 N.E.2d at
       1146. When the statutory language is clear and unambiguous, a court must give effect to the
       statute’s plain meaning without resorting to extrinsic statutory-construction aids. Pappas,
       242 Ill. 2d at 180, 950 N.E.2d at 1146. Thus, a court may examine legislative history only
       when the legislature’s intent is not clear from the statute’s plain language. People v. Jones,
       214 Ill. 2d 187, 193, 824 N.E.2d 239, 242 (2005). Accordingly, petitioner’s first several
       arguments regarding the history of section 503(f) and the existing case law at the time of its
       enactment are irrelevant unless this court finds an ambiguity exists. See Jones, 214 Ill. 2d at
       195-99, 824 N.E.2d at 243-46 (finding the statute’s language was unclear before addressing
       the history of the statute and the presumptions related to the enactment of new legislation).
       “A statute is ambiguous if it is capable of more than one reasonable interpretation.” People
       ex rel. Department of Public Aid v. Smith, 212 Ill. 2d 389, 397, 818 N.E.2d 1204, 1209
       (2004).
¶ 10        Section 503 of the Dissolution Act addresses the disposition of property and its
       subsection (f) states the following:
            “In a proceeding for dissolution of marriage or declaration of invalidity of marriage or
            in a proceeding for disposition of property following dissolution of marriage by a court
            that lacked personal jurisdiction over the absent spouse or lacked jurisdiction to dispose
            of the property, the court, in determining the value of the marital and non-marital
            property for purposes of dividing the property, shall value the property as of the date of
            trial or some other date as close to the date of trial as is practicable.” 750 ILCS 5/503(f)
            (West 2000).
¶ 11        Petitioner first argues section 503(f) is patently ambiguous, meaning the ambiguity arises
       out of the words themselves (Hoglund v. State Farm Mutual Automobile Insurance Co., 148
       Ill. 2d 272, 279, 592 N.E.2d 1031, 1035 (1992) (quoting Black’s Law Dictionary 102 (3d ed.
       1933)). Specifically, petitioner argues “the date of trial” language is ambiguous because in
       bifurcated proceedings more than one trial takes place. However, in interpreting a statute one
       must read the provision as a whole and not in isolation. Pappas, 242 Ill. 2d at 180, 950
       N.E.2d at 1146. Section 503 does not distinguish dissolution-of-marriage proceedings that
       are addressed all in one trial from those addressed in multiple trials. Moreover, section 503
       addresses only the disposition of property and has nothing to do with the grounds for a
       dissolution. Thus, the only reasonable interpretation of section 503(f) is that it is referring
       to the trial in which the property distribution is to be decided. Accordingly, we find section
       503(f) is not patently ambiguous.


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¶ 12       Petitioner further asserts that, if section 503(f) is not patently ambiguous, then it produces
       a latent ambiguity. A latent ambiguity arises when the words of the legislation are clear but,
       due to external circumstances, the literal application of those words would create an
       absurdity the legislative body could not possibly have intended. Dusthimer v. Board of
       Trustees of the University of Illinois, 368 Ill. App. 3d 159, 168, 857 N.E.2d 343, 353 (2006).
       This court has stated the following cautions regarding latent ambiguities:
           “To maintain the separation of the legislative and judicial branches and avoid
           compromising our fidelity to the text, we should be extremely reluctant to second-guess
           the clear language of legislation in the name of preventing a latent ambiguity. [Citation.]
           Whenever a court disregards the clear language of legislation in the name of ‘avoiding
           absurdity,’ it runs the risk of implementing its own notions of optimal public policy and
           effectively becoming a legislature. Interpreting legislation to mean something other than
           what it clearly says is a measure of last resort, to avoid ‘great injustice’ or an outcome
           that could be characterized, without exaggeration, as an absurdity and an utter frustration
           of the apparent purpose of the legislation.” Dusthimer, 368 Ill. App. 3d at 168-69, 857
           N.E.2d at 353.
¶ 13       Petitioner argues the application of section 503(f) to bifurcated proceedings, such as the
       one in this case, produces the absurd result of providing a windfall to the former spouse by
       allowing him or her to capture the fruits of the other party’s postdissolution efforts. He
       further contends such a result is contrary to public policy embodied in other subsections of
       section 503 that provide only value created during the marriage is marital property.
¶ 14       Section 503(b)(1) of the Dissolution Act (750 ILCS 5/503(b)(1) (West 2000)) provides
       the presumption of marital property does not apply to property acquired by a spouse after the
       date of the dissolution. Section 503(c) of the Dissolution Act (750 ILCS 5/503(c) (West
       2000)) then addresses the treatment of commingled marital and nonmarital property. Section
       503(d)(1) of the Dissolution Act (750 ILCS 5/503(d)(1) (West 2000)) also requires the trial
       court to consider, inter alia, the following in distributing the parties’ property: “the
       contribution of each party to the acquisition, preservation, or increase or decrease in the value
       of the marital or non-marital property, including the contribution of a spouse as a homemaker
       or to the family unit.” The aforementioned provisions provide a framework for the trial court
       to distribute the parties’ property in a manner that takes into account appreciation of marital
       property due to postdissolution efforts. If the party expending the effort can show his or her
       contributions increased the value of the marital asset, then the windfall alleged by petitioner
       would not occur.
¶ 15       Moreover, petitioner argues the Fifth District’s In re Marriage of Cutler, 334 Ill. App.
       3d 731, 778 N.E.2d 762 (2002), demonstrates that changes in the value of marital property
       based on efforts after the dissolution of marriage should not be treated as accruing to the
       marriage. We disagree. There, the Fifth District concluded, in a nonbifurcated proceeding,
       the valuation of a business determined by the capitalized returns method was an error. Cutler,
       334 Ill. App. 3d at 737, 778 N.E.2d at 768. As an aside, we note the Cutler court failed to
       recognize section 503(f) and erroneously stated the valuation date was the dissolution date.
       Cutler, 334 Ill. App. 3d at 737, 778 N.E.2d at 767. Citing In re Marriage of Frazier, 125 Ill.
       App. 3d 473, 476-77, 466 N.E.2d 290, 293 (1984), the court noted the application of the

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       capitalized returns method was an improper way to value a business as a marital asset
       because the calculation necessarily included as marital property labor which would be
       performed subsequent to the dissolution, resulting in an excessive valuation. Cutler, 334 Ill.
       App. 3d at 737, 778 N.E.2d at 767-68. That method involved reducing the party’s future
       earnings to present cash value. See Frazier, 125 Ill. App. 3d at 476, 466 N.E.2d at 293.
       Assets acquired after the dissolution judgment are not marital property (750 ILCS 5/503(b)
       (West 2000)), and thus the consideration of postdissolution earnings would be improper.
       However, at issue with section 503(f) are postdissolution changes in the value of property
       that was acquired before the dissolution, not afterward. As noted, any efforts by one of the
       parties to increase the value of an asset is considered under section 503(d)(1).
¶ 16       Additionally, petitioner argues a new spouse could also have an interest in any
       postdissolution increases in value. However, any claim by a party’s new spouse to property
       involved in a prior marriage would be properly addressed in a future dissolution under the
       provisions of section 503. Further, we disagree with petitioner a valuation date after the
       dissolution judgment creates “perverse incentives.” If a former spouse declines to maintain
       marital property, that fact will be taken into consideration under section 503(d)(1), just like
       any efforts that increase the value would be taken into consideration.
¶ 17       Petitioner also questions why postdissolution changes in values should be shared when
       it was the titleholder that decided not to sell the property and put the money elsewhere.
       However, petitioner overlooks section 501.1(a)(1) of the Dissolution Act (750 ILCS
       5/501.1(a)(1) (West 2000)), which provides for a dissolution action stay until a final
       judgment is entered that restrains the parties from, inter alia, transferring or spending any
       property without the consent of the other party or a court order, except for the usual course
       of business, the necessities of life, and expenses related to the proceedings. Thus, only in
       limited circumstances can a party to a dissolution judgment act unilaterally with respect to
       property until the final judgment is entered. Ergo, petitioner’s argument carries little weight.
¶ 18       We note using any other date not connected to the trial on the issue of property
       distribution is more likely to produce an anomalous result. If one uses an earlier date and the
       assets have decreased in value, then the trial court is distributing assets that no longer exist,
       creating an unenforceable order. See In re Marriage of Schinelli, 406 Ill. App. 3d 991, 1002,
       942 N.E.2d 682, 691 (2011) (finding a dissolution judgment was unenforceable as to the
       distribution of an investment account where the account had lost more than $100,000 in
       value since the judgment’s entry). Moreover, if the property appreciates in value without any
       effort by either party, it creates a windfall to the lucky party that receives that property in the
       distribution. We recognize property values can change between the trial and the actual date
       of judgment. However, any such changes would likely be smaller than another date that was
       farther removed from the judgment.
¶ 19       Accordingly, we decline to second-guess the legislature and find section 503(f) does not
       produce a latent ambiguity. We do not overlook the fact our interpretation of section 503(f)
       disregards long existing case law. However, we point out the Dissolution Act has been
       amended numerous times since the decision in Rossi, including the addition of sections 501.1
       (providing the restraint on property), 503(c) (addressing commingling of marital and
       nonmarital property), and 503(f) (addressing valuation date). Moreover, in the current

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       economic climate, assets are just as likely to decrease in value as to increase, and courts
       cannot distribute assets that no longer exist.

¶ 20                                   III. CONCLUSION
¶ 21       For the reasons stated, we answer the question of the Champaign County circuit court,
       finding the appropriate valuation date for the situation presented is the date of trial on the
       property-distribution matter or some other date as close to the date of that trial as is
       practicable, and remand for further proceedings.

¶ 22       Question answered; cause remanded.

¶ 23       JUSTICE APPLETON, specially concurring:
¶ 24       While I concur with the reasoning and result expressed by the majority, I write separately
       to highlight some concerns with the possible effect of the answer we announce today to the
       certified question.
¶ 25       Where, as apparently in this case, the parties have substantial assets and business
       interests, the answer to the certified question may serve to create a new level of
       gamesmanship in the resolution of a divorce proceeding. Given that the proper evaluation
       of diverse business assets is a very time-consuming process and the discovery needed to test
       those valuations consumes even more time, the value of the marital estate can, and likely
       will, change (sometimes dramatically) while this process plays out. Of course, that will
       require a whole new round of valuations.
¶ 26       Many judges will refuse to enter a “grounds only” judgment of dissolution for this reason.
       However, there are some cases where the entry of a “grounds only” judgment is necessary
       due to the personal circumstances of the parties. Even in a case without such special
       circumstances, the trial court must have the ability to determine a final valuation date to force
       resolution of the proceedings, as we have held here, recognizing “as close to the trial date as
       practicable” is a flexible concept the trial court can use as the specifics of the case before it
       requires.




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