Attorney fees in domestic relations cases: the 2009 Amendments to "Leveling of the Playing Field".
On January 1 of this year, six important changes in the law governing attorney fees in domestic relations cases took effect. This article discusses these long awaited amendments to 1997's complete overhaul of the fee provisions, commonly known as the "Leveling of the Playing Field" law.
Domestic relations attorneys recognized the need for clarification. Over the past two years, the Attorney Fees Committee of the ISBA Family Law Section Council reviewed all of the fee provisions in the Illinois Marriage and Dissolution of Marriage Act ("IMDMA"), reviewing proposed changes from various sources.
The committee concluded that some changes to the IMDMA fee provisions were necessary and found middle ground among varying positions. The committee presented its report to the ISBA Family Law Section Council, and in May 2008 the council unanimously approved the committee's recommendations.
These recommendations became Senate Bill 65 (sponsored by Rep. John E. Bradley (D-Marion) and Senator Ira E. Silverstein (D-Chicago)). The bill unanimously passed the Illinois House (117-0) and Senate (59-0). On August 18, 2009, Governor Quinn signed SB 65 into law as PA 96-583.
Each change is discussed in turn below.
1. The presumption that interim-fee hearings are summary now applies only to prejudgment dissolution proceedings
After the enactment of the "Leveling the Playing Field" legislation, parties litigating a divorce case could ask the court for interim fees (i.e., fees awarded to a party during the pendency of the case). By statute, hearings on requests for interim fees were summary, not evidentiary, which in practice meant less rigorous judicial oversight.
Less judicial caution was appropriate for granting interim fees in pre-decree divorce cases because the trial court could adjust (or "true up") the ultimate division of the marital estate at the end of the case to account for attorney fee payments by each party. The court could also deem interim payments an advance against one spouse's share of the marital estate. Accordingly, summary hearing on these petitions for attorney fees have worked well in prejudgment divorce cases.
That has not always been the case in postjudgment, paternity, and some other cases where no marital estate exists. In those cases, an interim fee cannot be an "advance" against a marital estate that isn't there. In the absence of a marital estate, it is virtually impossible to adjust for overpayment from, or repayment to, a payor at the close of the case.
Because there is no marital estate in these types of cases (e.g., paternity, post-decree divorce, etc.), the requisite judicial caution is now available under section 508(a) of the IMDMA, found at 750 ILCS 5/508(a). Revised section 508(a) now provides as follows, with the revision in italics:
(a) The court from time to time, after due notice and hearing, and after considering the financial resources of the parties, may order any party to pay a reasonable amount for his own or the other party's costs and attorney's fees. Interim attorney's fees and costs may be awarded from the opposing party in a pre-judgment dissolution proceeding in accordance with subsection (c-1) of Section 501 and in any other proceeding under this subsection. At the conclusion of any prejudgment dissolution proceeding under this subsection, contribution to attorney's fees and costs may be awarded from the opposing party in accordance with subsection (j) of Section 503 and in any other proceeding under this subsection. Fees and costs may be awarded in any proceeding to counsel from a former client in accordance with subsection (c) of this Section. (1)
The revisions restrict summary hearings in nondivorce prejudgment cases and provide that any petition for an interim award of fees to a party in any nondivorce prejudgment proceeding (such as a post-decree divorce case or a parentage case) would be pursuant to the general principles of section 508(a).
A summary hearing would still be permissible, because nothing in the amendments precludes the parties from stipulating to a summary hearing or the court from approving such a stipulation. The amendments do not alter the requirement that a supporting affidavit must accompany any and all petitions for an interim award. The subject matter of such affidavits is addressed in section 501(c-1)(1). Correspondingly, that section was amended as follows (changes in italic):
(1) Except for good cause shown, a proceeding for (or relating to) interim attorney's fees and costs in a pre-judgment dissolution proceeding shall be nonevidentiary and summary in nature. All bearings for or relating to interim attorneys' fees and costs under this subsection shall be scheduled expeditiously by the court. When a party files a petition for interim attorney's fees and costs supported by one or more affidavits that delineate relevant factors, the court (or a hearing officer) shall assess an interim award after affording the opposing party a reasonable opportunity to file a responsive pleading. A responsive pleading shall set out the amount of each retainer or other payment or payments, or both, previously paid to the responding party's counsel by or on behalf of the responding party. In assessing an interim award, the court shall consider all relevant factors, as presented, that appear reasonable and necessary.... 
2. Petitions for fee "contribution" need not be filed before judgment is entered
Section 503(j) governs petitions for contribution (i.e., one spouse asking the other spouse to pay a portion of his or her attorney fees). Section 503(j) of the IMDMA required parties to file a petition for contribution within 30 days after proofs had closed and before judgment was entered. Under the amended law, contribution petitions no longer have to be filed before judgment is entered.
The deadline for filing a petition for contribution in the pre-amendment version of section 503(j) has produced an unfortunate amount of litigation since 1997. This led to conflicting decisions from various districts of the appellate court, primarily in postjudgment divorce cases. In 2007, the second district even reversed its holding in an earlier case, stating as follows in In re Marriage of Blum: (3)
In sum, we reconsider the holding of Konchar and hold that the time limits of section 503(j)(l) of the Act do not apply to petitions for contribution to attorney fees in postdecree proceedings. Rather, in conformity with the language of section 508(a) of the Act, such petitions are timely if filed "at the conclusion of the case," that is, within 30 days after the date on which judgment is entered. (4)
The result achieved in Blum is in the best interests of both litigants and the courts. Accordingly, section 508(a) was amended to codify the Blum holding and expand it to all nonprejudgment dissolution of marriage cases.
3. The deadlines for filing petitions for final fee-setting hearings are more flexible
Strictly procedural changes were also made to subsection 508(c)(5) of the IM DMA. These changes allow more reasonable, less rigid deadlines for filing a petition (or praecipe) for a final setting-of-fees hearing under subsection 508(c)(5).
In a divorce proceeding, the underlying case between the parties continues when a post-judgment motion or a notice of appeal is filed and--because the property division has not taken effect--a party owing fees often cannot reach funds to make payment to his or her counsel. Though issues between parties should be fully resolved before a court turns to disputes between lawyer and client, rigid filing requirements applicable to post-decree motions or appeals all but required an attorney to withdraw as counsel and file against his or her client while the substantive case continued. This makes no sense.
Similarly, client and counsel often need more time to work out payment arrangements than was available under the 60-day deadline for filing a praecipe and petition under subsection 508(c)(5). Moreover, even when counsel and client agree, 60 days is often not enough time for a client to raise needed funds.
Accordingly, the committee recommended changes to subsection 508(c)(5) that toll otherwise applicable deadlines in cases involving one or more post-judgment motion(s) or an appeal. These changes also allow client and counsel after a praecipe is filed to extend the deadline for filing a petition for a final setting of fees for up to one year. Subsection 508(c)(5) was amended to read as follows (changes are in italic):
(5) A petition (or a praecipe for fee hearing without the petition) shall be filed no later than the end of the period in which it is permissible to file a motion pursuant to Section 2-1203 of the Code of Civil Procedure. A praecipe for fee hearing shall be dismissed if a Petition for Setting Final Fees and Costs is not filed within 60 days after the filing of the praecipe.... Each of the foregoing deadlines for the filing of a praecipe or a petition shall be:
(A) tolled if a motion is filed under Section 2-1203 of the Code of Civil Procedure, in which instance, a petition (or a praecipe) shall be filed no later than thirty days following disposition of all Section 2-1203 motion(s); or,
(B) tolled if a notice of appeal is filed, in which instance a petition (or praecipe) shall be filed no later than thirty days following the date jurisdiction on the issue(s) appealed is returned to the trial court.
If a praecipe has been timely filed, then by timely filed written stipulation between counsel and client (or former client), the deadline for the filing of a petition may be extended for a period of up to one year. (5)
4. Billing statements no longer need be attached to consent-judgment petitions and thus made public
The IMDMA allows a party to consent to the entry of a judgment against himself for attorney fees (known as a "consent judgment"). To effectuate the consent judgment, counsel files a petition asking the court to approve it.
Under the old version of subsection 508(d), consent judgments for fees required an attorney to incorporate billing statements into, and physically attach them to, his or her petition for a consent judgment. The billing statements then became part of the public record. This was wholly unnecessary, intrusive, and a cure worse than the disease.
As amended, subsection 508(d) provides that attorneys will no longer be required to physically attach billing statements to the petition asking the court to enter a judgment by consent. Instead, counsel must file a supporting affidavit and include a specific representation that the requisite itemization on billing has been provided to the client. The court can, on its own motion, ask the attorney to provide billing statements for review.
5. The 508(b) penalty for improper hearings applies to all hearings under the IMDMA, not just fee hearings
Subsection 508(b) governs attorney fees in contempt cases. The 1997 amendments to subsection 508(b) were intended to strengthen the strictures for failing to comply with orders or judgments.
The second to last sentence in the 1997 version of the subsection reads as follows: "If at any time a court finds that a hearing under this Section was precipitated or conducted for any improper purpose, the court shall allocate fees and costs of all parties for the hearing to the party or counsel found to have acted improperly."
The use of the word "Section" in the second to last sentence in subsection 508(b) was intended to refer to the statutory list of proceedings for which fee awards under section 508 are permissible. This list is set forth in subprovisions (1)-(6) of subsection 508(a) and includes the "maintenance" ... "defense" ... "enforcement or modification of any judgment under this Act," along with many other proceedings and actions.
The amended version of subsection 508(b) changes "hearings under this Section'" to "hearings under this Act." This corrects the misimpression that the final two sentences of subsection 508(b)--the portion that directs a court to allocate fees to a party that conducted a hearing for improper purposes--apply only to a fee hearing under section 508. In fact, they apply to all hearings under the IMDMA.
6. Interim fee payments are not automatically considered dissipation of marital funds
One objective of the 1997 "Leveling" legislation was to eliminate the automatic presumption that payments of litigation costs during the pendency of a case under the IMDMA are ipso facto dissipation. "Dissipation" is defined as the use of marital funds for a purpose unrelated to the marriage after an irretrievable breakdown of that marriage.
The second district acknowledged this objective in In re Marriage of DeLarco: (6) "Under the [1997 version of] section 501(c-1) of the Act ..., however, payments made by the parties to their respective attorneys are considered advances from the marital estate." (7) Unfortunately, in the recent case In re Marriage of Manker, (8) the fourth district referred to a husband's payment of legal fees to his divorce counsel as "dissipation" and affirmed the trial court's order requiring the husband to pay his wife 50 percent of the excess of his fees over her fees.
To address this confusion, the amendment cross-references the "advances from the marital estate" under subsection 501 (c-1) with the dissipation factors in subsection 503(d). This empowers the trial court to use the "add back and charge to" approach to litigation costs without forcing some or all litigation expenses into the "dissipation" definition.
Subsection 503(d)(1) was amended to read as follows (changes in italic):
(d).... It also shall divide the marital property without regard to marital misconduct in just proportions considering all relevant factors, including:
(1) the contribution of each party to the acquisition, preservation, or increase or decrease in value of the marital or non-marital property, including (i) any such decrease attributable to a payment deemed to have been an advance from the parties' marital estate under subsection(c-1)(2) of Section SOI and (ii) the contribution of a spouse as a homemaker or to the family unit. (5)
Note that litigation payments could still constitute "dissipation" in certain circumstances. For example, in In re Marriage of Hagshenas (10) the second district found there could be expenditures "shown to be so selfish and excessive and improper as to constitute an outright waste of marital funds." (11) In theory, the Hagshenas principle could apply to litigation expenses in the appropriate circumstances. In any such case, a finding of dissipation would be the result of a court applying standard dissipation principles under Illinois law.
It's not surprising that a sweeping law like "Leveling the Playing Field" left unanswered questions and led to some misinterpretations. The amendments are designed to address the most important problems. Family law practitioners must educate themselves about these changes and understand the application of each.
The Attorney Pees Committee of the ISBA Family Law Section Council is Jacalyn Birnbaum, Chicago; Hon. Harry E. Clem, Urbana; Thomas A. Else, Wheaton; Paulette M. Gray, Woodstock; Hon. Edward R. Jordan, Chicago; David H. Hopkins, Wheaton; David P. Pasulka, Chicago; and William J. Scott, Wheaton.
By the Attorney Fees Committee of the ISBA family Law Section Council
(1.) 750 ILCS 5/508.
(2.) 750 ILCS 5/501(c-1)(1).
(3.) 377 Ill App 3d 509, 879 NE2d 940 (2d D 2007).
(4.) Id at 535, 879 NE2d at 962.
(5.) 750 ILCS 5/508(c)(5).
(6.) 313 Ill App 3d 107,728 NE2d 1278 (2d D 2000).
(7.) Id at 112,728 NE2d at 1284.
(8.) 375 Ill App 3d 465,874 NE2d 880 (4th D 2007).
(9.) 750 ILCS 5/503(d)(1).
(10.) 234 Ill App 3d 178,600 NE2d 437 (2d D 1992).
(11.) Id at 197,600 NE2d at 451.