Heroy – Illinois Supreme Court: Despite Having $2.3 Million, a Party Has an Inability to Pay Fees when Considered in the Context of the Statutory Requirements for Contribution Hearings

IRMO Heroy, 2017 IL 120205.

Heroy provided the Illinois Supreme Court with the opportunity to finally try to provide clarity regarding many competing appellate court decisions – whether the standard is ability / inability regarding contribution petitions or whether the standards are those set forth in the statute. Unfortunately, the case retains the so called “ability/inability” standard but in the context, at least involving post-decree cases. This historical standard looks at whether one party is unable to pay attorney’s fees and the other party is able to do so. But the language of prior caselaw regarding ability / inability is not taken literally but in the context of overall relative ability to pay regarding whether payment would potentially undermine one’s financial stability.

The Supreme Court stated:

The language in section 508 is clear and unambiguous. The trial court must (1) “consider[ ] the financial resources of the parties” and (2) make its decision on a petition for contribution “in accordance with subsection (j) of Section 503.” 750 ILCS 5/508(a) (West 2014). To say that the court should not consider the statutory factors is clearly contrary to the plain language of the statute. Nor are we convinced, however, that Schneider, Bussey, and Cotton must be overturned.In Schneider, the court stated that “[f]inancial inability exists where requiring payment of fees would strip that party of her means of support or undermine her financial stability.” 214 Ill. 2d at 174 (citing In re Marriage of Puls, 268 Ill. App. 3d 882, 889 (1994)). The court further noted that it considered the parties’ relative earning capacities, the parties’ shares of the marital assets, and the child support order before concluding that the circuit court had not erred when it ordered each party to pay their own fees. Id. at 174-75.In Bussey, the court considered the respondent’s net income, excluding child-support payments and social security benefits for her children; her monthly expenses; the fact that she owned no real estate; and the fact that she was returning to college to improve her employment opportunities. 108 Ill. 2d at 300. The court compared this information to the petitioner’s successful career, net income, real estate ownership, and investments. Id.In Cotton, the court considered the parties’ incomes but also considered the fact that the petitioner precipitated the need for the legal fees. 103 Ill. 2d at 361. The court concluded that it would be inequitable to require the respondent to pay the fees in light of these circumstances and not just on the basis of the parties’ respective incomes. Id. at 362.Finally, in In re Marriage of Pagano, the court found that the petitioner had some ability to pay her fees but that the trial court did not abuse its discretion when it found the petitioner’s financial stability would be undermined if she were required to pay the total amount of her fees. 154 Ill. 2d 174, 191 (1992). The court upheld an award for 60% of the petitioner’s attorney fees. Id. Thus, it is clear the inability to pay standard was never intended to limit awards of attorney fees to those situations in which a party could show a $0 bank balance. See Kaufman v. Kaufman, 22 Ill. App. 3d 1045, 1050 (1974) (“However, in this context, financial inability does not mean destitution.”); In re Marriage of Weinberg, 125 Ill. App. 3d 904, 919 (1984) (“[I]t is not necessary for the spouse seeking the fees to divest her capital assets [citation], deplete her means of support, or undermine her economic stability [citations] in order to pay [the attorney fees].”).Rather, 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. This conclusion is consistent with the statutory language of section 508 and with this court’s precedent.Accordingly, the Illinois Supreme Court, rather than looking only to the ability/inability standards, reviewed per the mandate of Section 503(j), the maintenance factors in 504 because maintenance was awarded. The Court noted that at the time of the trial the wife received assets with a net value of $4.15 million. At the time of the trial on the issue of the petition to modify or terminate maintenance, her asset base was $2.35 million including her interest in her home. The depletion was largely due to attorney’s fees payments. The Court also noted:

Though the circuit court did not expressly rely on these factors, the record also makes clear that Tuke enjoyed a lavish standard of living during the marriage, she had forgone her career to raise the couple’s children during the marriage, and because of changes to the industry, she was unlikely to be able to resume her career as a law librarian. The parties stipulated that $345,000 would be considered reasonable attorney fees for the litigation related to the petition to modify the maintenance payment. In her initial petition, Tuke stated that her attorney fees at that point exceeded $1 million. She requested another $100,000 in her petition for prospective fees.Next, the Supreme Court addressed the now former husband’s net estate which at the time of the divorce was valued at $3.13 million. At the time of his petition to terminate maintenance, the same had grown to almost $5 million while he also had a substantial additional non-marital estate. Accordingly, the Court found that the trial had not abused its discretion in requiring the former husband to pay $160,000 of his ex-wife’s attorney’s fees.

The Court stated succinctly:  “Thus, it is clear the inability to pay standard was never intended to limit awards of attorney fees to those situations in which a party could show a $0 bank balance.”

Regarding attorney’s fees, the Court concluded:

Several panels of our appellate court have addressed the perceived tension between this court’s holding in Schneider and section 508 of the Illinois Marriage and Dissolution of Marriage Act. Schneider states that a party seeking contribution must establish that he or she is unable to pay his or her attorney fees and that the other party is able to do so. Section 508 directs the court to consider a number of factors when deciding whether and in what proportion to award attorney fees. We find these two requirements complement, rather than contradict, each other. The statutory factors are the tools used by the court to decide whether a party is unable to pay and whether the other party is able to do so.Based upon the newest 2021 Crecos decision, however, we may now see the Illinois Supreme Court revisit this issue in an initial divorce case.  See the discussion in Gitlin on Divorce: A Guide to Illinois Divorce Law in the 2022-23 edition.