Why It’s Important to Conduct Discovery

college studentThe parties in the case of In re MARRIAGE OF CHERI LITTLE and DONALD LITTLE, ultimately settled their case amongst themselves by signing a Marital Settlement Agreement. After the divorce, Donald found out that Cheri had withheld information about an asset transfer.

On June 23, 2010, Cheri petitioned for the dissolution of her marriage to Donald. On October 10, 2012, the marriage was dissolved. The judgment of dissolution incorporated a MSA, which divided the assets and liabilities of the parties. In the MSA, Donald waived any interest in “Wife’s present or future interest in the marital business, formerly known as D & K Plastics.”

On May 7, 2013, Donald filed a petition to vacate the MSA under section 2-1401 of the Code (735 ILCS 5/2-1401 (West 2012)). In the petition, as amended, Donald alleged that, while the dissolution proceedings were pending, Cheri transferred assets belonging to the marital business, D&K Plastics, to her brother, Glen Dieter, and his company, Hydro-Master Parts Corp., with which she became involved. Donald alleged that Cheri testified to the contrary during the dissolution proceedings:
“10. Specifically, Cheri stated, under oath, in relevant part, the followings [sic]:
Q[.] What, if anything, did you have brought over or transferred from the Route
47 location [D&K Plastics] to where Hydro Plastics [sic] is right now?
A[.] I didn’t have anything transferred.
Q[.] Did you gift or give any of these things to your brother, who is now president
of that company?
A[.] Not that I know of, no.
Q[.] What have you done to help your brother run that company?
A[.] Bring in lunch.”

In answer to Donald’s post decree filing, Cheri argued that she had no interest in the assets, and even if she did, Donald had waived his interest in them. It was only through Donald’s well documented discovery practices that he was able to convince the reviewing court that he had only waived his interest in the asset because Cheri had effectively hid them from him.

Donald alleged that he (1) filed a motion to return personal/marital property; (2) reviewed Cheri’s December 1, 2010, comprehensive financial statement; (3) obtained a court order prohibiting Cheri from transferring property; (4) served Cheri with a notice to produce and marital interrogatories; (5) sent a letter under Illinois Supreme Court Rule 201(k) (eff. Jan. 1, 2013); (6) conferred with Cheri’s counsel; (7) filed a petition for a rule to show cause against Cheri for her failure to provide an accounting for the funds from the sale of business equipment; (8) reviewed Cheri’s January 18, 2012, comprehensive financial statement; (9) obtained Cheri’s sworn testimony that she did not transfer any assets to Dieter and did not have any involvement in his business; (10) sent a subpoena duces tecum to Old Second National Bank for documents relating to Deiter and his company; (11) fought Dieter’s motion to quash the subpoena and eventually obtained a court order to review the requested documents; and (12) paid almost $11,000 to private investigators in an attempt to determine whether Cheri had dissipated any marital assets or whether she was involved in Hydro-Master Parts.

Although the trial court granted Cheri’s motion to dismiss Donald’s motion to vacate the Marital Settlement Agreement, the Appellate Court reversed that ruling, primarily because Donald was able to show how much he had done to uncover the asset. For now, the case will go back to the trial court and it will proceed on Donald’s Motion to vacate. For these reasons, it is imperative that a person do all they can to uncover their spouses’ assets, and if you elect not to do formal discovery, and discover assets later, you are most likely going to be in a position that you will be unable to recover.

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