{ "id": 35398, "name": "In re MARRIAGE OF DANIEL M. WENC, Petitioner and Counterrespondent-Appellant, and ELIZABETH F. WENC, n/k/a Elizabeth F. Fleming, Respondent and Counterpetitioner-Appellee", "name_abbreviation": "In re Marriage of Wenc", "decision_date": "1998-01-13", "docket_number": "No. 2\u201496\u20141509", "first_page": "239", "last_page": "248", "citations": [ { "type": "official", "cite": "294 Ill. App. 3d 239" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "285 Ill. App. 3d 217", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1295650 ], "year": 1996, "pin_cites": [ { "page": "220" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/285/0217-01" ] }, { "cite": "258 Ill. App. 3d 401", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2881941 ], "weight": 3, "year": 1994, "pin_cites": [ { "page": "407" }, { "page": "407" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/258/0401-01" ] }, { "cite": "126 Cal. Rptr. 633", "category": "reporters:state", "reporter": "Cal. Rptr.", "year": 1976, "pin_cites": [ { "page": "635" } ], "opinion_index": 0 }, { "cite": "544 P.2d 561", "category": "reporters:state_regional", "reporter": "P.2d", "year": 1976, "pin_cites": [ { "page": "563" } ], "opinion_index": 0 }, { "cite": "15 Cal. 3d 838", "category": "reporters:state", "reporter": "Cal. 3d", "case_ids": [ 2272274 ], "year": 1976, "pin_cites": [ { "page": "842-43" } ], "opinion_index": 0, "case_paths": [ "/cal-3d/15/0838-01" ] }, { "cite": "66 Ill. B.J. 324", "category": "journals:journal", "reporter": "Ill. B.J.", "year": 1978, "pin_cites": [ { "page": "335" } ], "opinion_index": 0 }, { "cite": "267 Ill. App. 3d 761", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 333161 ], "weight": 2, "year": 1994, "pin_cites": [ { "page": "766" }, { "page": "766" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/267/0761-01" ] }, { "cite": "286 Ill. App. 3d 236", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1544421 ], "weight": 6, "year": 1997, "pin_cites": [ { "page": "238" }, { "page": "240-41" }, { "page": "241" }, { "page": "244" }, { "page": "245" }, { "page": "245" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/286/0236-01" ] }, { "cite": "285 Ill. App. 3d 573", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1295603 ], "weight": 2, "year": 1996, "pin_cites": [ { "page": "576" }, { "page": "575-76" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/285/0573-01" ] }, { "cite": "258 Ill. App. 3d 475", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2879074 ], "weight": 2, "year": 1994, "pin_cites": [ { "page": "478" }, { "page": "478" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/258/0475-01" ] }, { "cite": "223 Ill. App. 3d 510", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5257023 ], "year": 1992, "pin_cites": [ { "page": "518" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/223/0510-01" ] }, { "cite": "255 Ill. App. 3d 960", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2989398 ], "weight": 2, "year": 1994, "pin_cites": [ { "page": "962-63" }, { "page": "961-63", "parenthetical": "marital settlement agreement left determination of precise formula until proceeding after pensioner spouse retired" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/255/0960-01" ] }, { "cite": "78 Ill. App. 3d 653", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5602728 ], "weight": 7, "year": 1979, "pin_cites": [ { "page": "663" }, { "page": "663" }, { "page": "663" }, { "page": "663" }, { "page": "663" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/78/0653-01" ] } ], "analysis": { "cardinality": 897, "char_count": 21607, "ocr_confidence": 0.753, "pagerank": { "raw": 1.5306778239923496e-07, "percentile": 0.671047810123293 }, "sha256": "d953195d649c6e9464f409c72ea3a3ae45346627135d182ddd93a76078088d86", "simhash": "1:0a685d4ada42f4b7", "word_count": 3433 }, "last_updated": "2023-07-14T15:05:51.326352+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "In re MARRIAGE OF DANIEL M. WENC, Petitioner and Counterrespondent-Appellant, and ELIZABETH F. WENC, n/k/a Elizabeth F. Fleming, Respondent and Counterpetitioner-Appellee." ], "opinions": [ { "text": "JUSTICE BOWMAN\ndelivered the opinion of the court:\nPetitioner and counterrespondent, Daniel Wenc, and respondent and counterpetitioner, Elizabeth Wenc, n/k/a Elizabeth Fleming, married in 1961 and divorced in 1983. After petitioner retired, respondent sued to determine her share of his pension benefits. Petitioner appeals the ruling on respondent\u2019s suit, asserting that the trial court erred in interpreting the settlement agreement incorporated into the divorce judgment. We reverse the judgment and remand for further proceedings. We hold that (1) the trial court erred in applying In re Marriage of Hunt, 78 Ill. App. 3d 653 (1979), without fully considering the language of the settlement agreement; and (2) the agreement is ambiguous, necessitating an evidentiary hearing for a proper determination of the parties\u2019 intent.\nAt the time of the divorce, petitioner was 43 years old and respondent was 45. Since August 1, 1961, petitioner taught school full time, contributing to the Teachers\u2019 Retirement System of the State of Illinois (Retirement System) (see 40 ILCS 5/16 \u2014 101 et seq. (West 1994)). Paragraph 5 of the settlement agreement stated, as pertinent here:\n\"DANIEL\u2019S represented adjusted contribution to the Teacher Retirement Fund is *** $27,000. In addition thereto, DANIEL\u2019S estimated pension, assuming a retirement age of 55, is in the approximate sum of $677.00 per month, with an additional annuity of $1,212.00 per month. ELIZABETH shall be entitled to receive 30% of all of DANIEL\u2019S vested, non-vested and/or accrued pension / retirement benefits accumulated as of the date hereof \\i.e., the date of the dissolution] at such time in the future when and if said benefits are paid to DANIEL. All benefits accrued or accumulated by DANIEL hereafter shall be his sole and exclusive property.\u201d\nAt the end of the 1993-94 school year, petitioner retired. In June 1994, about two months before his fifty-fourth birthday, he started drawing his Retirement System pension. In April 1995, respondent brought this action, asking the court to hold petitioner in contempt of his obligation under paragraph 5 of the agreement. As pertinent here, respondent alleged that, since June 8, 1994, petitioner received $4,135.49 monthly in gross pension benefits but tendered respondent only $363.60 monthly, far short of her 30% share.\nPetitioner replied that his monthly payments followed the plain language of paragraph 5 by giving respondent 30% of the monthly benefit he had earned as of the dissolution. Petitioner relied in part on a letter from a legal assistant to the Teachers\u2019 Retirement System. The letter stated that, based on petitioner\u2019s years of creditable service and average salary from August 1, 1961, through November 30, 1983, and assuming he started drawing benefits on August 15, 1995 (when he turned 55), he would receive $709.93 monthly. Petitioner maintained that paragraph 5 entitled respondent to 30% of this sum, with adjustments for the temporarily lower benefit levels resulting from petitioner\u2019s early retirement. According to petitioner, his monthly payments to respondent were good-faith efforts to adhere to the settlement.\nThe matter proceeded to a hearing. Respondent called Vito Loisi, a certified public accountant, who opined that petitioner\u2019s method of calculating respondent\u2019s share of his monthly pension did not embody the 1983 settlement agreement. Loisi described two alternative methods he used to arrive at a proper allocation.\nThe first method was based on In re Marriage of Hunt, 78 Ill. App. 3d 653 (1979), where the appellate court explained that a court should calculate the marital portion of a monthly pension benefit by dividing the total years of credited service during the marriage by the total years of credited service and multiplying this fraction by the monthly benefit. Hunt, 78 Ill. App. 3d at 663; see also In re Marriage of Alshouse, 255 Ill. App. 3d 960, 962-63 (1994). Assuming (as is not in dispute) that petitioner had 21 years of credited service during the marriage and 32 years total credited service, Loisi applied the Hunt algorithm to petitioner\u2019s gross monthly benefit of $4,135.49. Adjusting for the contribution that enabled petitioner to retire early, Loisi found that, for the first 24 months, the marital portion was $2,073.58 monthly (21/32 of the net monthly benefit after the contribution) and respondent\u2019s 30% share was thus $622.07 monthly. After the first two years, respondent would receive $814.17 monthly \u2014 30% of the marital 21/s2 of the gross benefit.\nLoisi suggested alternatively that the $709.93 sum could be adjusted for growth based on earnings or inflation taking place between the divorce and the payout. Using a \"conservative\u201d annual growth rate of 6%, Loisi calculated respondent\u2019s share of the monthly benefit at $431.84 for the first 24 months and $623.94 thereafter. Under either method, respondent\u2019s share would increase, along with petitioner\u2019s payment, after his sixty-first birthday.\nLoisi preferred using the Hunt-based method to determine the marital part of the pension benefits, as the years of service before the dissolution helped to increase the benefits that accrued afterward. According to Loisi, petitioner\u2019s calculation was unacceptable because it took the projected benefit amount as of the dissolution date and \"froze\u201d that amount as of that earlier date. Loisi agreed with the Retirement System\u2019s letter to petitioner that, if petitioner stopped working the day of the dissolution, he would later receive $709.93 monthly. However, Loisi noted that petitioner did not adjust for the growth of this sum between 1983 and petitioner\u2019s retirement much later.\nThe trial court refused to find petitioner in contempt (a holding not at issue here) but otherwise sided with respondent. The court applied the Hunt formula, explaining that the language of paragraph 5 showed that the parties drafted it with Hunt in mind. Thus, they did not intend that respondent\u2019s share of the benefit be \"frozen\u201d as of the date of the divorce. Under Hunt, respondent was entitled to $814.17 of the $4,135.49 monthly benefit; for the first 24 months, this share would be $622.07, the same proportion of the lower initial benefit. The court denied petitioner\u2019s motion to reconsider. He appeals.\nPetitioner argues that the trial court awarded respondent an excessive share of his pension benefit. He asserts that, under the plain language of paragraph 5, respondent was entitled only to what he had been paying her \u2014 30% of what he would have received each month had he stopped working as of the dissolution judgment in November 1983. According to petitioner, the trial court imported the Hunt formula into an agreement that plainly declined to follow Hunt.\nRespondent counters that the trial court\u2019s decision is consistent with the language of paragraph 5 and rightly accounts for the greater importance of early contributions \u2014 here, those made during the marriage and not afterward \u2014 to the eventual pension benefit ultimately paid.\nInterpreting a marital settlement agreement is a matter of contract construction; the court seeks to effectuate the parties\u2019 intent. In re Marriage of Agustsson, 223 Ill. App. 3d 510, 518 (1992). Ordinarily, the best guide to the parties\u2019 intent is the language they used. In re Marriage of Frain, 258 Ill. App. 3d 475, 478 (1994). When contract terminology is unambiguous, it must be given its plain and ordinary meaning. Frain, 258 Ill. App. 3d at 478. However, where the language is ambiguous, the trial court may receive paroi evidence to decide what the parties intended. Pepper Construction Co. v. Transcontinental Insurance Co., 285 Ill. App. 3d 573, 576 (1996). Whether an agreement is ambiguous is a question of law. Pepper Construction Co., 285 Ill. App. 3d at 575-76.\nWe must note that much of paragraph 5\u2019s meaning is unclear from the record. Nowhere does anyone identify or explain the \"additional annuity of $1,212.00 per month\u201d due petitioner on his retirement. Also, neither the trial court nor the parties attached any significance to the opening recital of petitioner\u2019s total contributions to date. Under the Retirement System statute, petitioner\u2019s benefits depend not on the amount of contributions but on a function of a multiplier (related to the pensioner\u2019s years of service) and the pensioner\u2019s final average salary. Although the statute allows for benefits based on accumulated contributions at the time of retirement, if that amount is the greater of the two, the parties appear to agree that at all pertinent times petitioner\u2019s benefit level would not have been based on this alternate methodology. See 40 ILCS 5/16\u2014 133(a) (West 1994); In re Marriage of Wisniewski, 286 Ill. App. 3d 236, 238 (1997). We shall not try to explain these terms, although on remand the parties may attempt to do so if it sheds light on the proper interpretation of the terminology directly at issue.\nWe hold first that the trial court erred in finding that paragraph 5 unambiguously shows that the parties intended to base the division of benefits on the Hunt formula. At least without extrinsic evidence of the parties\u2019 intent, the similarities between this case and Hunt are too limited to support an inference that the division of the pension should be similar.\nA dissolution judgment may value and divide marital property in a spouse\u2019s pension plan by using the \"immediate offset\u201d approach or the \"reserved jurisdiction\u201d approach. See Wisniewski, 286 Ill. App. 3d at 240-41; Hunt, 78 Ill. App. 3d at 663. Under the immediate offset approach, the court uses actuarial evidence to assign a present value to the pension interest at the time of dissolution. Next, the court determines the marital portion of that interest by multiplying it by a fraction representing the proportion of marital years in which benefits were accumulated to the total years in which benefits were accumulated. The court awards the pension interest to the pensioner spouse and gives the nonpensioner sufficient other marital property to offset her marital share in the interest. In re Marriage of Burkhart, 267 Ill. App. 3d 761, 766 (1994); Hunt, 78 Ill. App. 3d at 663.\nUnder the reserved jurisdiction approach, the trial court awards each spouse an appropriate share of the pension \"to be paid 'if, as, and when\u2019 the pension becomes payable.\u201d Hunt, 78 Ill. App. 3d at 663, quoting M. Kalcheim, Marital Property, Tax Ramifications, and Maintenance: Practice Under the Illinois Marriage and Dissolution of Marriage Act \u2014 A Comparative Study, 66 Ill. B.J. 324, 335 (1978), and citing In re Marriage of Brown, 15 Cal. 3d 838, 842-43, 544 P.2d 561, 563, 126 Cal. Rptr. 633, 635 (1976); see Burkhart, 267 Ill. App. 3d at 766. However, as petitioner notes, that the court reserves payment until long after the dissolution judgment does not mean it reserves a decision on how to calculate the eventual payment. Depending on how the court exercises its discretion or what the parties have agreed, the dissolution judgment itself may dictate how the pension benefits will be allocated; however, the court may reserve this decision until the benefits are paid. Wisniewski, 286 Ill. App. 3d at 241; see, e.g., In re Marriage of Alshouse, 255 Ill. App. 3d 960, 961-63 (1994) (marital settlement agreement left determination of precise formula until proceeding after pensioner spouse retired).\nIn Hunt, where no settlement agreement was involved, the appellate court set out rules to guide trial courts in the exercise of their discretion in dividing marital property. The court explained that the marital portion of the pension interest was the overall interest multiplied by a fraction representing the length of time during the marriage in which the pension accumulated divided by the total time in which the pension accumulated. Hunt, 78 Ill. App. 3d at 663. Here, the trial court applied the Hunt rule to the settlement agreement, giving respondent 30% of that part of the payments which, under the Hunt rule, were marital property. However, because the parties signed an agreement covering this very subject, the court\u2019s decision makes sense only if the agreement shows the parties intended to divide the benefits this way. Of course, the parties were also free to allocate the benefits by some other formula. Therefore, as the trial court recognized, applying Hunt directly makes sense only if paragraph 5 so dictates.\nIn finding that paragraph 5 does embody Hunt, the trial court focused on the parties\u2019 use of the type of \u201cif, as, and when\u201d language Hunt emphasized. However, we agree with petitioner that the use of this kind of language signifies only that the parties chose the reserved jurisdiction approach over the immediate offset approach. These \"magic words\u201d imply that the pension will be divided when it becomes payable rather than at the time of the dissolution, but they say nothing about how the payments will be divided. Thus, the proper construction of paragraph 5 requires more inquiry into what the parties meant by the language they used.\nWe proceed to examine that language to determine whether it is ambiguous. If it is not, it must be applied as written; if it is, extrinsic evidence of the parties\u2019 intent will be necessary. (Although the hearing included expert testimony, there was no evidence of the intent behind the language. At the very least, there was not enough extrinsic evidence for a proper determination of this factual issue.) We hold that the language is ambiguous.\nParagraph 5 is not long, but it is dense with potentially confusing terminology. Aside from the unexplained verbiage we have noted, several phrases are less than crystal clear. The distinctions, if any, among \"vested, non-vested, and/or accrued pension benefits\u201d are not spelled out at all in the agreement or precisely in the case law. Thus, merely from the language of paragraph 5, we cannot say for certain what \"benefits\u201d petitioner had \"accumulated or accrued\u201d \u2014 another potentially treacherous phrase \u2014 at the time of the divorce judgment. Petitioner\u2019s reading of the agreement is straightforward and reasonable enough. However, it is not the only reasonable one.\nAs the cases demonstrate, the delay between the divorce judgment and the payout period casts into doubt precisely how much of the ultimate pension amount is the base for respondent\u2019s 30% share. This is because cases recognize the time value of money and that pension contributions in the early (marital) years carry more earning weight than those in the later (postdissolution) years. Courts ordinarily compensate the nonpensioner spouse for this fact by using rules that may make the marital portion of the payments appreciably greater than what the pensioner spouse would have received based on his years of employment during the marriage.\nIn re Marriage of Blackston, 258 Ill. App. 3d 401 (1994), illustrates this principle backhandedly, even though the appellate court denied the nonpensioner spouse the recovery she sought. There, the trial court used the reserved jurisdiction approach, ordering the distribution of payments according to the Hunt formula. On appeal, the husband argued that this distribution unfairly benefited the wife by rewarding her for postdissolution increases in the value of the husband\u2019s pension. On the state of the record, the Appellate Court, Fifth District, agreed. The court rejected the wife\u2019s (and the trial court\u2019s) assumption that the husband\u2019s early earnings carried greater weight than those made in later years \"because the earlier dollars have had many more years to grow through accumulation of interest on investment.\u201d Blackston, 258 Ill. App. 3d at 407. However, the appellate court acknowledged that, in principle, this consideration might be proper; it reversed only because the wife had provided no evidence of the time value of money. Blackston, 258 Ill. App. 3d at 407.\nIn Wisniewski, the Appellate Court, First District, agreed that the time value of money is a legitimate factor but disagreed with the fifth district that the nonpensioner spouse needs to introduce evidence of the earning power of early payments in order to obtain a distribution based on the Hunt formula. The court reasoned, correctly in our view, that our courts \"[have] long recognized the time value of money.\u201d Wisniewski, 286 Ill. App. 3d at 244.\nThe application of this insight in Wisniewski is significant. Not only did the court hold that the trial court did not abuse its discretion in apportioning benefits according to Hunt\u2019s proportional formula, but it also implied that the court would have abused its discretion in refusing to account for the greater earning power of early contributions. The husband\u2019s .argument, which implied otherwise, ignored the \"fact *** that contributions in the early years are more valuable to the payor of the plan than are payments in the last years. [The wife] cannot be deprived of the interest earned by marital contributions just because the pension plan does not specifically account for that interest in determining the pension benefit.\u201d Wisniewski, 286 Ill. App. 3d at 245. Similarly, even though the multiplier was greater for the later years than for the earlier ones, the court \"[could not] say that the years after the marriage were more valuable than the years during the marriage. Because of the time value of money, the opposite would appear to be true, unless contributions were significantly greater in later years.\u201d Wisniewski, 286 Ill. App. 3d at 245.\nAlthough not by itself dispositive, it is worth noting that the husband\u2019s interpretation of the settlement agreement would entitle him to a benefits division so lopsided that it would probably not survive appellate review absent an agreement. This is because, to arrive at this result, the court either would have had to calculate the marital share of the pension benefits in a way inconsistent with Hunt or would have had to award respondent a truly tiny portion of the marital share as properly calculated under Hunt. The parties were married for about two-thirds of the years during which petitioner earned credited service, yet the base figure out of which he suggests the court carve respondent\u2019s 30% share is approximately one-third of respondent\u2019s actual benefit. This disparity is permissible if the parties agreed to it. Yet it is so great \u2014 especially given the importance of the marital years of credited service to the size of the eventual benefit \u2014 that we are reluctant to conclude that respondent clearly struck such a bargain.\nWe do not believe that paragraph 5 unambiguously embodies an agreement that \"freezes\u201d respondent\u2019s share without accounting for the long-recognized time value of money. The agreement speaks of both \"vested\u201d pension rights and \"non-vested\u201d pension rights, even though there is no dispute that, by 1983, petitioner had served enough years so that his right to collect a pension upon retirement had already \"vested.\u201d Thus, petitioner\u2019s reading of the disputed terminology would require us to ignore as wholly superfluous the parties\u2019 deliberate reference to any \"non-vested\u201d rights under the Retirement System pension plan. (Aside perhaps from the paragraph\u2019s mysterious reference to an additional monthly annuity of $1,212, nothing in the record suggests that the parties contemplated the division of benefits in another plan to which petitioner belonged.) Generally, we will not assume that the parties inserted key contractual language for no reason at all, as a document should be read to give effect to all its provisions. Roubik v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 285 Ill. App. 3d 217, 220 (1996).\nFurthermore, the importance of petitioner\u2019s early years of credited service to the eventual payout level suggests that paragraph 5 contains further ambiguities. From the perspective of over a decade after the dissolution \u2014 when petitioner\u2019s pension rights not only vested but matured \u2014 it is at least debatable what part of his eventual benefits of over $4,000 monthly petitioner \"accumulated\u201d as of 1983. That part might be construed to include the amount that the earlier (marital) years added to the eventual sum through compounding.. Similarly, what part of his eventual benefits petitioner \"accrued or accumulated\u201d after the dissolution is open to some reasonable dispute. Depending on the parties\u2019 intent, he might be deemed to have accrued or accumulated, through the workings of compound interest, a sizeable amount of the eventual benefit beyond what he would have received had he retired in 1983. These murky matters of interpretation are for the trial court. We cannot accept either the court\u2019s view that the agreement unambiguously supports respondent\u2019s interpretation or petitioner\u2019s assertion that the contract clearly favors his reading. Therefore, we must reverse the judgment and remand this cause so that the court may receive extrinsic evidence on how the parties intended to allocate petitioner\u2019s pension benefits.\nThe judgment of the circuit court of Du Page County is reversed, and the cause is remanded.\nReversed and remanded.\nGEIGER, P.J., and THOMAS, J., concur.", "type": "majority", "author": "JUSTICE BOWMAN" } ], "attorneys": [ "Timothy B. Newitt, of Johnson, Westra, Broecker, Whittaker & Newitt, P.C., of Carol Stream, for appellant.", "Robin R. Miller, of DaRosa & Miller, of Wheaton, for appellee." ], "corrections": "", "head_matter": "In re MARRIAGE OF DANIEL M. WENC, Petitioner and Counterrespondent-Appellant, and ELIZABETH F. WENC, n/k/a Elizabeth F. Fleming, Respondent and Counterpetitioner-Appellee.\nSecond District\nNo. 2\u201496\u20141509\nOpinion filed January 13, 1998.\n\u2014Rehearing denied February 9, 1998.\nTimothy B. Newitt, of Johnson, Westra, Broecker, Whittaker & Newitt, P.C., of Carol Stream, for appellant.\nRobin R. Miller, of DaRosa & Miller, of Wheaton, for appellee." }, "file_name": "0239-01", "first_page_order": 257, "last_page_order": 266 }