In re Marriage of Witvoet, 2019 IL App (3d) 180313-U

1) Case citation and parties
- In re Marriage of Witvoet, 2019 IL App (3d) 180313-U (Ill. App. Ct., 3d Dist. Aug. 9, 2019) (Rule 23 order — not precedent).
- Petitioner-Appellee: Julie A. Witvoet. Respondent-Appellant: Mark J. Witvoet. Divorce action involving ownership and characterization of assets in family business Witvoet Tire Sales, Inc. (WTS).

2) Key legal issues
- Whether amounts reflected on WTS’s corporate tax returns ($103,550 on Schedule L, line 20) were properly characterized as a loan (debt owed to the parties) or as equity/capital.
- Whether the trial court abused its discretion in dividing marital property by awarding WTS to Mark but crediting Julie one-half of the loan amount against a lump-sum equalization payment.
- Preservation of issues and appropriateness of raising debt-vs.-equity arguments on appeal.

3) Holding / outcome
- Affirmed. Appellate court held the trial court’s factual finding that the $103,550 was a loan repayable to the parties was not against the manifest weight of the evidence. The trial court did not abuse its discretion in awarding each party one-half of the loan amount and crediting Julie’s half against the lump-sum payment.

4) Significant legal reasoning
- Standard of review: factual findings reviewed for manifest weight of the evidence; property division reviewed for abuse of discretion.
- Evidence supporting characterization as a loan: consistent book entries from WTS inception, accountant’s advice to list the amount so shareholders could later retrieve funds, valuation expert (Brend) testified the amount was a shareholder loan/receivable and affected business valuation, and Mark’s own prior admissions (he signed returns and earlier testified the amount was owed to the parties). The trial court found Mark’s later contradictory testimony incredible.
- Appellant tried to reframe the issue as an equity/capital contribution relying on federal Fin Hay factors — the court rejected that because Mark did not present that theory at trial and federal authority interpreting tax statutes is not controlling in Illinois family-law asset division.
- Court applied 750 ILCS 5/503(d) equitable-division factors and found the 50/50 allocation reasonable.

5) Practice implications (concise takeaways for attorneys)
- Maintain contemporaneous corporate documentation (loan agreements, shareholder notes, board minutes) to support characterization of injections as debt or equity.
- Corporate tax return entries and consistent bookkeeping can be powerful evidence of parties’ intent and affect valuation.
- Preserving theories at trial is essential; novel legal frameworks raised only on appeal may be rejected.
- In valuation disputes, remember shareholder loans reduce business value if treated as debt; they can be split and used as credits against equalization payments under Section 503(d).
- Prepare for credibility battles—trial court credibility findings carry strong deference on appeal.