In re The Marriage of Clutts, 2022 IL App (1st) 201120-U

In re the Marriage of Clutts, 2022 IL App (1st) 201120‑U (Ill. App. Ct. 1st Dist. Mar. 18, 2022) (Rule 23 — non‑precedential)

Parties
- Petitioner/Counter‑Respondent‑Appellant: Raymond E. Clutts
- Respondent/Counter‑Petitioner: Deanna Clutts
- Receiver/Receiver‑Appellee: Neal H. Levin (Freeborn & Peters, as receiver of Raymond E. Clutts, P.C.)

Key legal issues
- Validity and scope of a receivership appointed in a dissolution proceeding (personal jurisdiction and necessary‑party issues, including corporate entities owned/controlled by the spouse).
- Proper procedure for approving a receiver’s fees and costs (notice, opportunity to contest, discovery).
- Interaction with Ill. S. Ct. Rule 776 (receiver duties for a law firm) and whether a receiver may be compensated contrary to normal Rule 776 practice.
- Effect of a notice of appeal on a trial court’s ability to reconsider a fee judgment.

Holding / Outcome
- The appellate court reversed the circuit court’s grant of the receiver’s final fee petition and remanded.
- Direction to the trial court: first determine whether failure to acquire jurisdiction/serve the corporate entities voids the receivership; if the receivership remains, determine when Raymond Clutts received notice and reduce fees/costs for periods before notice; for post‑notice fees, consider Clutts’s substantive objections and his discovery requests.

Significant legal reasoning (condensed)
- The court rejected Clutts’s argument that the divorce court lacked jurisdiction over him personally — the dissolution court had broad authority over marital property and related matters.
- Critical defect identified: the corporate entities (e.g., Raymond E. Clutts, P.C.; Systematic Medical Reimbursement, Inc.) were never properly served and no pierce‑the‑corporate‑veil finding was made — they were necessary parties to a receivership that effectively took control of corporate property. That omission may void the receivership.
- Procedurally, if the receivership stands, notice timing is dispositive: fees/costs incurred before personal notice may be disallowable. The trial court must evaluate reasonableness of fees, the receiver’s conduct (including use of outside counsel to operate the practice), and whether discovery is warranted to test the fee petition.
- The trial court improperly declined to consider a motion to reconsider after a notice of appeal; the appellate remand requires the court to address pending objections consistent with jurisdictional limits.

Practice implications for family law attorneys
- When seeking a receivership in dissolution matters that implicate corporate entities, ensure entities are named/served and veil‑piercing elements are addressed; receivership over corporate assets absent necessary parties risks reversal.
- For receiver fee petitions: give clear, provable notice to affected parties; maintain contemporaneous billing and documentation; be prepared to justify post‑appointment strategy and use of outside counsel.
- Defense strategy: timely challenge notice/service and seek discovery into receiver fees and conduct; assert necessity of corporate parties early.
- Courts should resolve jurisdictional/party‑joinder issues before approving large receiver fee awards.