In re Marriage of Anderson, No. 3-09-0829 (Ill. App. Ct. Nov. 15, 2010)

Parties
- Petitioner/Appellee: Michael Anderson
- Respondent/Appellant: Molly A. Murphy (f/k/a Molly A. Anderson)

Key legal issues
1. What constitutes “net income” for child support under §505(a)(3) of the Illinois Marriage and Dissolution of Marriage Act — specifically whether proceeds from a forced sale of nonmarital stock, bonus/commission income, and gifts/loans are includable.
2. Whether maintenance should be terminated based on changed circumstances.
3. Award and allocation of attorney fees for post-dissolution enforcement litigation.
4. Reallocation of children’s uninsured medical expenses.
5. Return of personal property the children left with the noncustodial parent.
6. Tax-exemption rights when a parent fails to amend returns.
7. Modification of financial reporting requirements.

Holding / outcome (summary)
- The trial court: ordered past-due child support/maintenance ($31,892.88); modified ongoing child support to the statutory percentage of Michael’s current employment net income (excluding the AEC dividends after the stock was cashed out); terminated maintenance (effective June 1, 2009); allocated uncovered medical expenses 50/50; denied return of many items to Molly as gifts or previously purchased; permitted Molly to claim both children as exemptions until majority because Michael failed to amend returns; required Michael to provide annual W-2s and notice of employment changes; awarded Molly $25,000 in attorney fees.
- The appellate court affirmed in part, reversed/remanded in part, vacated/remanded in part (see significant reasoning below).

Significant legal reasoning
- Statutory interpretation of “income” under §505(a)(3) is a question of law reviewed de novo; courts give undefined statutory terms their plain and ordinary meaning.
- The court treated dividend streams as income when received, but a one-time forced liquidation of nonmarital stock (a capital transaction the owner could not control) was not treated as recurring “income” for child support purposes. As a result, cessation of dividend payments constituted a substantial change in circumstances supporting modification/termination.
- Gifts and intermittent transfers from family must be supported by evidence of regularity or constructive receipt before being imputed as income.
- Failure to timely amend tax returns that prejudices the custodial parent can justify awarding dependency exemptions to protect that parent.
- Repeated noncompliance and protracted enforcement litigation can support an award of attorney fees.

Practice implications
- Distinguish capital receipts (forced stock sales, one‑time lump sums) from recurring income when arguing support calculations; document predictability/regularity of any nonwage receipts before seeking imputation.
- When dividends or other streams end, file prompt motions to modify support/maintenance — courts will consider cessation a substantial change.
- Preserve evidence of gifts/loans (frequency, intent, documentation) if you seek or oppose imputation.
- Enforce opposing parties’ tax‑return obligations early; failure to cooperate can yield remedial tax‑exemption rulings and fee awards.
- Maintain strict compliance with court-ordered financial reporting; noncompliance can justify remedies and fees.